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Mbeki team meets Mugabe

Zim Independent

Dumisani
Muleya

SOUTH African president Thabo Mbeki's mediation team on
the Zimbabwe crisis recently held a crucial meeting with President Robert
Mugabe in a bid to kick-start multi-party dialogue.

High-level
government sources said Mbeki sent a delegation led by his Local Government
minister Sydney Mufamadi to meet Mugabe and government officials to discuss
modalities of the mediation process designed to find a negotiated settlement
to current political and economic problems.

Mbeki was in March
appointed by an extraordinary Sadc summit to deal with the Zimbabwe
situation and is expected to report back every three months. His first
feedback is expected by June 30.

The sources said Mufamadi's
delegation came to Harare during the first week of May and held secret
meetings with Mugabe and top government officials to brainstorm on the
talks, now already informally underway.

"Mufamadi and his
delegation came and held secret talks with Mugabe on a range of issues
relating to the negotiation process and procedures," a source said. "This
was part of the ongoing consultations on the talks."

Consultations
between Mbeki's team, Zanu PF officials and opposition Movement for
Democratic Change (MDC) representatives are gathering momentum as Sadc races
against time to deal with the hitherto intractable Zimbabwe
crisis.

Recently Mbeki said there was not much time to do
everything necessary to ensure free and fair elections next
year.

Sadc executive secretary Tomaz Salomao last month came to
Harare to assess the country's economic situation. Sadc leaders in March
said after their meeting in Tanzania they would help Zimbabwe to resolve the
current economic problems by proposing an economic package.

Civil society groups will also be included in the negotiations as Mbeki
seeks to go for a broad consultative process which addresses a gamut of
issues confronting the nation.

Mbeki said yesterday in Cape Town
that talks between the ruling party and the MDC were going on "very
well".

"I can confirm that the discussions are proceeding very
well," Mbeki told South Africa's parliament. He did not give
details.

However, the Zimbabwe Independent can reveal that Mufamadi
met with Mugabe and discussed modalities of the negotiations process,
focusing on how to deal with the main agenda items, constitutional and
electoral law reforms, and an end to political violence.

The
talks are aimed at ensuring free and fair presidential and parliamentary
elections next year.

The MDC has said that it will not contest the
elections unless there are constitutional and electoral law changes. The two
MDC factions appear to be working together and speaking with one voice on
the issue of negotiations.

Mbeki's team has also held several
meetings with representatives of the two MDC factions, who include Professor
Welshman Ncube (Secretary-General - Arthur Mutambara) and Tendai Biti
(Secretary-General - Morgan Tsvangirai). The two groups have produced a
joint report on the agenda, although they are still waiting for their
principals to give them further instructions on how to proceed.

Zanu PF, sources said, has appointed a four-member team which includes
Justice minister Patrick Chinamasa, to negotiate on its behalf. Chinamasa
and Ncube held informal talks between 2003 and 2004 on behalf of Zanu PF and
the MDC, respectively, in a bid to break the political deadlock which mainly
stems from disputed elections.

The two negotiators produced a
draft constitution - which Mbeki has publicly confirmed - from the
government-sponsored draft constitution that was rejected in a referendum in
2000 and the National Constitutional Assembly document produced around the
same time.

However, the draft by Chinamasa and Ncube was sunk by
factional fights in the ruling party and opposition. Mugabe and Tsvangirai
had initialled each page of the draft and were ready to approve it. Mbeki
also had his own copy. The Independent revealed the secret talks and draft
produced at the time.

Mbeki, who has successfully mediated in a
number of conflicts on the African continent, has failed since 2000 to
resolve the Zimbabwe impasse. Foreign Affairs secretary, Joey Bimha, said
yesterday Harare will back Mbeki on Sadc's initiative.

Latest on NMB forex fraud

Zim Independent

Shakeman
Mugari

THE NMB Bank fraud scandal deepened as further details
on the off-shore account used to siphon US$4,7 million out of the bank
emerged.

Sources this week said the fraud, which went undetected
for two years, was discovered in March this year. The sources said the
bank's international division noticed that its foreign currency deposits
were shrinking at an alarming rate.

The Zimbabwe Independent
can reveal the fraud involved a Switzerland-based bank called AKB Private
Bank with its head office in Zurich.

The central bank and the
police fraud squad believe that the money was transferred into an AKB
Private Bank account belonging to a Zimbabwean company called Cardinal
Finance under account number 16701690347.

The money was siphoned
through 65 transactions, all of which were approved by senior executives in
the treasury department.

Seven senior officials in the treasury
department were suspended last week to facilitate
investigations.

In 2005 the key suspect in the fraud, Shame
Mandara, made two transactions amounting to about US$300 000 using the
Cardinal Finance account. Sources said the other 63 transactions were done
between July 2006 and March this year before the scandal was
unearthed.

These details came as it emerged that NMB chief
executive David Hatendi rushed to Switzerland on Sunday to try and negotiate
for the early repatriation of the money, much of which is said to belong to
exporters.

Hatendi is expected back today but the sources said they
did not expect AKB Private Bank to give him any useful details because of
tight banking regulations in Switzerland.

The sources said the
fraud centred on the RBZ's foreign currency remittance system for exporters.
A source said the suspect would claim that the monies were being transferred
under the RBZ's remittance scheme. He would claim that the remittance had
been approved by an official from the RBZ called Zunza. No such person works
at the RBZ.

"He would wait until the bank has remitted the foreign
currency belonging to exporters to the RBZ, then he would use the same
dealer notes to make further claims," said an RBZ official who is involved
in the investigations.

The money would be transferred into
Cardinal Finance's account in Zurich. NMB would in return get the equivalent
in Zimbabwean dollars from two local companies called Haus (Pvt) Ltd and
Forthfort Enterprises Ltd. The bulk of the Zimbabwe dollar component came
from Forthfort Enterprises which has an account with Standard Chartered
Bank. Haus has an account with Stanbic Bank.

Australia defends NGOs financial support

Zim Independent

Pindai Dube

The Australian ambassador to Zimbabwe has defended
his government's decision to offer financial support to civic groups and
non-governmental organisations opposed to President Robert Mugabe's despotic
rule saying it is necessary to put a stop to human rights abuses by the Zanu
PF regime.

On Monday the Australian government announced the
release of about US$15 million to help those fighting against human rights
violations by state agents and organs.

The announcement came at
the same time as the cancellation of the Australian cricket tour of Zimbabwe
in September to protest state-sponsored violence.

The Zanu PF
government accused Australia's prime minister John Howard of racism and
politicising sport.

In an interview with the Zimbabwe Independent
on Tuesday in Bulawayo, the Australian ambassador, Jon Sheppard, said his
government will not cease funding President Mugabe's critics in the country
until there was an end to human rights abuses and a return to the rule of
law.

"There is nothing wrong with us funding all civic groups and
NGOs in their war against human rights abuses as the protests are
legitimate. The Zimbabwe government might be crying foul but they should
stop harassing citizens. Even the United Nations is not impressed by the sad
situation obtaining in this country," Sheppard said.

"The world
cannot continue watching the people of Zimbabwe being brutalised every week.
As long as there is no stop to human rights abuses by the Mugabe regime, my
government will continue stretching a helping hand to those who are fighting
for good governance."

Information minister Sikhanyiso Ndlovu this
week accused Howard of using sport to "demonise" the government, while his
deputy Bright Matonga said Canberra should not be judging this
country.

Ndlovu told ABC Radio that Howard had Gestapo-like
tendencies and was "the international Gestapo".

"Everybody
knows those kinds of statements are not to be taken seriously. It is so
obviously not true," Downer told reporters in Adelaide.

"I think
making those kinds of statements, coming from the mouth of a minister of a
government, tells you a great deal about what sort of government we are
dealing with here.

"This is a dictatorial regime, which has plunged
its country into almost total poverty and has abused severely the human
rights of anybody who dares oppose or criticise the government.

"I think it is a tragedy what has happened in Zimbabwe and I think the
sooner that the regime of President Mugabe comes to an end the
better."

Last week in Harare police assaulted members of the Law
Society including its president Beatrice Mtetwa. The lawyers said they
intended to present a petition to the Minister of Justice to protest the
arrest of human rights lawyers Alec Muchadehama and Andrew
Makoni.

A high powered delegation of the presidents of law
societies in the region flew into the country last Thursday to call on the
government of President Mugabe to respect the rule of law.

Taming inflation:learning from Brazil's
experience

Zim Independent

By Caio Megale

ZIMBABWE'S current economic
environment bears stark resemblance to the situation in Brazil 20 years ago.
At the time, Brazil experienced high levels of inflation significantly above
double-digits per year for practically the entire second half of the 20th
century.

In the 1960s and 70s, inflation in Brazil was controlled
at relatively palatable levels of around 20% per year, and economic growth
was significant, financed by a high degree of indebtedness. Brazilians
generally accepted this gradual rise in prices because overall economic
growth was relatively good.

In fact, inflation was seen as the
undesired consequence of economic development. To protect the salaries of
workers, the government introduced indexation, whereby wage contracts were
adjusted to match inflation. However, after the 1970s, economic growth
stalled and inflation skyrocketed from around 300% to 2 000%. At this point
inflation became a tremendous problem and economic policy-makers realised
they had to tackle the problem.

There are a number of costs of high
inflation. High inflation decreases the predictability of economic
variables. With no predictability you cannot invest and the potential growth
of the country collapses. Inflation is also a powerful income concentration
instrument. Real wages are eroded and poor people do not have access to
financial protection. In the end,their economic situation worsens under
inflation.

Brazil's experience in combating inflation provides us
with important lessons. First, we have to bear in mind that any disinflation
plan involves important costs, mainly in terms of social wellbeing. Thus,
the perception that inflation is a major obstacle to the country's
development must be accepted by most of society, and all efforts must be
made to overcome this obstacle.

Another important lesson is
that one should not succumb to the temptation to carry out social justice
during the implementation of a stabilisation plan. The stabilisation plan
must be neutral from an income distribution standpoint. Otherwise, stability
will bring a distortion of relative prices, and pressure to realign prices
will tend to bring the inflationary process back.

The common
reaction of authorities is to stabilise prices to protect the population
from spiraling costs. In Brazil, each new attempt to stabilise prices was
followed by periods (increasingly shorter) of some stability, before
inflation returned with even greater vengeance.

Lasting
stabilisation was only achieved with the implementation of the Real Plan in
1994. A combination of bold measures, well-grounded on economic theory, with
the lessons learned from a series of ill-fated experiments, enabled Brazil
to reduce inflation, which, at that moment, exceeded 1 000% per year. Before
the 1994 Real Plan, the Brazilian government introduced monetary reform that
established a new currency in February 1986. This reform was accompanied by
a series of measures such as freezing of prices and salary
increments.

Between March and June 1986, inflation came down
strongly from over 400% per year to between 10-15% per year. However, two
crucial errors were made: for all practical purposes, salaries were not
frozen, and the clear signs of excess aggregate demand in the following
months were not combated. Bonuses were granted to the lower classes via a
16% hike in the minimum wage, and the dates of the collective labour
agreements were reestablished.

In addition, salaries were corrected
based on 60% of the accumulated variation of the cost of living in the 12
previous months, and a trigger was implemented to automatically correct
salaries whenever accumulated inflation totalled 20%. This currency reform
failed, prompting government to introduce other packages in the ensuing
years. They all had similar diagnosis and consequences.

One
such plan was launched in March 1990 by the economic team of President
Fernando Collor, the first president elected by popular vote in Brazil in
almost 30 years. Although it failed, the Collor government achieved
important steps in the structural reform of the Brazilian economy that were
crucial to the success of the Real Plan in later years: it launched the
process to privatise state-owned companies and promoted a broad opening of
the economy to foreign trade.

Learning from past failures, the Real
Plan embarked on a new anti-inflation strategy.

While many past
plans started with price and wage freezes that were announced by surprise,
the Real Plan did not make use of any direct control of prices or surprise
announcements. In fact, the main innovative characteristic of the Real Plan
was its transparency following the catchphrase of the economic team at the
time of the launch of the plan: "announce only what will be done and do only
what was announced". Also key to the plan's success was the role of the
Minister of Finance in protecting the economic team from political
interference, as political pressure had been the main cause of previous
failures.

The first phase of the Real Plan consisted of controlling
government spending. The Brazilian leg transfer funds to fulfill the budget.
With the fiscal side heading towards equilibrium, the next step was to move
towards the full indexation of the economy. The first step was to create a
unit of account that would serve as an indexer for all prices in the
economy. Dollarisation of the economy thus was prevented because agents did
not need to flee to the dollar to protect their assets given the legal
mechanism of indexation. The strategy was to create a proto-currency that
would work only as a unit of account.

The exchange rate of this
proto-currency (called URV, or Real Unit of Value) in relation to the legal
currency would be calculated as a function of a basket of general-use price
indexes, in accordance with a previously announced formula. The conversion
of prices was voluntary and the government concerned itself only with
establishing clear rules for the conversion of some services (school
tuitions and rents, for example), the prices of public tariffs and wages,
which were to be converted from legal currency to URVs based on the real
average of the four months prior to the implementation of the
plan.

In other words, the need for the plan to be neutral from the
distributive point of view was maintained. All of these points were
exhaustively presented to the public in a way that there were no surprises
to the stakeholders.

Over the first three months that the URV
was in effect the public became increasingly used to the new unit of
account, even though to settle their purchases they used a currency that
lost value on a daily basis. After three months, economic agents were
required to display the price of their products in both the legal currency
and URVs.

The economy was then full indexed, on July 1, 1994, the
old currency ceased to exist and the central bank began to issue a new
currency, called the real, which was worth exactly one URV. In that instant
inflation fell from 30% per month to less than 20% per year.

What have we learned from Brazil's anti-inflation plan period?

First, society must be keenly aware of the consequences of high inflation.
Government, business, and the average person must all agree that inflation
is an ill that must be tackled and they all must be prepared for any bumps
along that road in order to succeed.

Secondly, do not attempt to
carry out social justice programs during an anti-inflation plan. Efforts to
increase wages, for instance, will only jeopardise the success of the
plan.

Thirdly, taming inflation is not the solution of all
problems. It's just one but very important step along the economic recovery
path.

Zimbabwe should learn from Brazil.

* Dr Caio
Megale is partner and chief economist at Maua Investitmentos, Brazil. He is
the 2005 recipient of the Brazil Development Bank Economy
Award.

Lessons on high inflation for Zimbabwe

Zim Independent

ZIMBABWE currently has the highest rate of inflation in the world at 3 700%.
The high rate of inflation has contributed to the contraction of the
economy, which has declined by about 30% since 1999. This IMF paper by
Sharmini Coorey, Jens R Clausen, Norbert Funke, Sònia Muñoz, and Bakar
Ould-Abdallah examines the stabilisation experience of countries that
experienced similar rates of inflation (above 1 000%) during 1980-2005 and
draws lessons for Zimbabwe.

Hyperinflations are largely
a modern and rare phenomenon generally associated with printing money to
finance large fiscal deficits due to wars, revolutions, the end of empires,
and the establishment of new states. According to Cagan's definition,
hyperinflation begins in the month inflation first exceeds 50% (per month)
and ends in the month before the monthly inflation rate drops below 50% for
at least a year. Since monthly inflation is still officially under 50%,
Zimbabwe currently does not qualify formally as a hyperinflation case by
Cagan's definition.

It is worth mentioning, however, that the
official CPI in Zimbabwe is likely to substantially understate inflation
because about a third of the basket reflects price-controlled items and the
consumption weights are outdated. Many in the private sector believe that
the true rate of annual inflation was closer to 3 000% in February 2007.
Monthly inflation rates in informal private indices - which are more heavily
weighted by food - have exceeded 50% for several months.

Another distinct feature of Zimbabwe's economy is the sustained contraction
in output. Real GDP is estimated to have declined by about 30% since 1999.
While the initial output collapse is widely attributed to the chaotic
seizure of commercial farms - the backbone of the economy - other factors
have also contributed in recent years:

* Price distortions due to
extensive controls and regulation, particularly relating to the exchange
rate which is fixed by the Reserve Bank of Zimbabwe at a highly overvalued
rate;

* The collapse of investor confidence due to unpredictable
policies and lack of respect for property rights, particularly in
agriculture and mining; and

* Minimal external financing
because of poor relations with creditors and donors and deteriorating
economic and social conditions.

Without an immediate stabilisation
package and comprehensive medium-term structural reforms, prospects are for
Zimbabwe's inflation to continue accelerating and for the economic crisis to
deepen.

Do the countries that have gone through similar episodes of
high inflation in recent decades have lessons to offer
Zimbabwe?

Using a 12-month inflation rate of 1 000% as the
threshold for defining a period of high inflation, we identify 30 such
inflation episodes in 24 countries between 1980 and 2005.

Accelerating inflation in Zimbabwe has been fuelled by high rates of money
growth reflecting rising fiscal and quasi-fiscal deficits. The adjusted
overall fiscal deficit or financing requirement, including government and
RBZ interest payments, is estimated to have amounted to about 80% of GDP in
2006. These large and rising deficits have been partly financed through
money creation, giving rise to accelerating rates of inflation. In fact,
money growth and inflation in 2006 would have been even higher without the
implicit taxation of the banking system via a lengthening of the maturity of
treasury and RBZ bills and payment of highly negative real interest rates on
these bills.

The recent announcement by the RBZ that it would
create a fully-owned subsidiary called Fiscorp to carry out QFAs, possibly
on a transitory basis, would not address the fundamental issue - the massive
price and exchange rate distortions and poor governance in the public sector
(including public enterprises) that place an unsustainable burden on the
public finances.

The international experience suggests that in
countries such as Zimbabwe, with high inflation and extensive relative price
distortions, strong upfront adjustment through a broad-based policy package
is needed to establish credibility and minimise the cost of adjustment. For
Zimbabwe, we identify five interrelated elements that would be necessary in
an initial stabilisation package:

* Transparent transfer of
quasi-fiscal activities to the government budget, as announced by the 2007
budget. No entity outside the budget should undertake any activity of a
fiscal nature (including interest payments, subsidised credits etc) without
offsetting transfers transparently provided for in the budget;

* Substantial fiscal tightening, including the newly-absorbed QFAs of the
RBZ or any other public entity. This tightening could be achieved by
reduction in the government wage bill - which is large by regional
standards - and capital expenditure - which more than doubled in real terms
in 2006 - as well as from cuts in (former) QFAs, particularly subsidies to
public enterprises.

* Complementary measures, such as price and
exchange rate liberalisation would be needed to ensure that QFAs are durably
reduced.

* Fiscal expenditure would need to be prioritised (within
a tighter envelope) to ensure food security rehabilitate the collapsing
health infrastructure, and provide a targeted social safety net to protect
vulnerable groups, including those affected by HIV/Aids and Operation
Murambatsvina.

* Liberalising the exchange regime by unifying
the exchange rate and removing restrictions on current international
payments and transfers. The interbank exchange rate would need to be
substantially devalued promptly and all multiple exchange rates eliminated.
The interbank rate should then be depreciated steadily toward the parallel
market rate (which would appreciate as fiscal and monetary policies are
tightened), and the unified exchange rate subsequently floated.

* Deregulating prices and imposing a hard budget constraint on public
enterprises.

Establishing a strong money anchor to reduce
inflation and inflation expectations. Once exchange rates are unified and
the RBZ disengages from QFAs, a broad money anchor and a flexible exchange
regime could be established, with reserve money as the operational target.
To ensure that monetary policy is effective and reduce liquidity risks in
the banking system, interest rates would need to be gradually moved to
market determined levels.

Achieving sustained growth in
Zimbabwe will require - in addition to stabilisation - comprehensive
structural reform and better governance over the medium term.

Public enterprise and civil service reform, central bank reform, as well as
public expenditure and tax reform will be important to sustain the fiscal
adjustment and stimulate output growth. Improving governance, including by
protecting private property rights and increasing policy predictability,
will be essential for reinvigorating investor confidence.

Zimbabwe's situation with respect to agriculture - a key sector of the
economy - needs to be resolved. At present, commercial bank lending to the
sector remains limited in part because existing arrangements, including the
recently-introduced 99-year leases, do not provide adequate security of land
tenure. A broad-based agreement among stakeholders on land tenure may be
needed to achieve sustained growth in agriculture and in the
economy.

The lack of external financing is an issue for Zimbabwe,
but cross-country evidence does not indicate this is a reason by itself to
delay the implementation of a stabilisation programme. Even with limited
external support, decisive policy action led to positive stabilisation gains
in several cases. However, in almost all these cases there was external
support in the form of close policy advice and technical
assistance.

For Zimbabwe, strengthening relations with donors and
mobilising external financing would ease the burden of the adjustment needed
for a strong, upfront reduction in inflation.

If a credible
stabilisation package is implemented upfront and followed by reforms to
restore investor confidence, Zimbabwe's economy is sufficiently diversified
and potentially strong enough to recover.

Govt faces grilling over rights abuses

Zim Independent

Augustine Mukaro

AS state agents intensify repression of
dissenting voices in Zimbabwe, government is being grilled for human rights
violations at the 41st Session of the African Commission on Human and
Peoples' Rights (ACHPR) which opened in Ghana on Wednesday.

Government is due to present its report responding to allegations of rampant
human rights violations perpetrated by state agents and recommendations made
by the 2002 ACHPR fact-finding mission. It will also have to explain its
failure to prosecute those responsible in accordance with the Paris
Principles.

Civic groups attending the session said the government
report glosses over critical issues which plunged the country into the
current economic crisis. They say it fails to acknowledge that any crisis
exists.

It evades virtually all the negative incidents that the
country went through including the violence currently taking place and that
characterised the land invasions and all the three elections held over the
past seven years.

"The government report is silent on the
widely condemned Operation Murambatsvina, which left over 700 000 people
homeless," one civic group said. "The report mentions in passing Operation
Garikai without giving any background as why they had to embark on the
nationwide house construction programme."

The groups said
government is denying all the allegations of human rights abuses and blames
external forces for the deterioration of the economy.

It is not
taking responsibility for anything, including the demolitions of
Murambatsvina and the brutal attacks on the opposition. However, hordes of
local and international civic organisations have thronged Ghana to present
"shadow" reports that counter the government report.

Civic groups'
reports will expose government's unwillingness to uphold its primary
responsibility to promote, protect, and fulfil human rights. They seek to
pin down government as the leading perpetrator of rights
abuses.

Zimbabwe Lawyers for Human Rights (ZLHR) director Irene
Petras confirmed that the African NGO Forum adopted a resolution on
Zimbabwe, which cited numerous ongoing violations. Petras said the ZLHR
would highlight the recent attacks on lawyers and the opposition. She said
there has been a lot of solidarity and understanding of the challenges
currently facing Zimbabweans.

During a forum prior to the ACHPR
session, African NGOs expressed concern over the situation of journalists
and freedom of expression activists in Africa, especially in Zimbabwe,
Eritrea, the Gambia, Ethiopia, Sierra Leone and Somalia and called upon
these and various other African states to respect provisions in the African
Charter, the Declaration of Principles on Freedom of Expression in Africa
and their various constitutions on the right to freedom of
expression.

On Zimbabwe, the Forum also called upon the government
of Zimbabwe to investigate thoroughly all-outstanding issues. "We call upon
the government of Zimbabwe to thoroughly investigate all outstanding issues
including the bombings of the Daily News printing press and offices of Voice
of the People Trust as well as the abduction and murder of freelance
cameraperson Edward Chikomba," the resolution said.

There was
also emphasis on the government's urgent need to repeal laws which hinder
the enjoyment of the right to freedom of expression such as the Access to
Information and Protection of Privacy Act (Aippa), the Public Order and
Security Act (Posa) and the Broadcasting Services Act (BSA).

MISA-Zimbabwe Legal Officer Wilbert Mandinde is among the various
representatives of NGOs and will present a paper on the state of the
media.

At the opening ceremony on Wednesday, Justice minister
Patrick Chinamasa made a presentation on behalf of AU member states, urging
them to ratify the protocol on the rights of women in Africa and another
establishing the African Court.

Civic groups hope Chinamasa
would lead by example and make sure Zimbabwe ratifies both
protocols.

The ACHPR's resolution noted
its concern over the "continuing deterioration of the human rights
situation" in Zimbabwe, and expressed alarm at the number of people
displaced by the official clean-up campaign, Operation Murambatsvina, which
the government said was aimed at clearing slums and flushing out
criminals.

The resolution said the Zimbabwean government should
"respect fundamental rights", such as freedom of expression, association and
assembly, and repeal or amend "repressive legislation", including Aippa, the
BSA and Posa.

The resolution further called upon the government
to implement recommendations of the commission's fact-finding mission of
June 2002, as well as the recommendations contained in the report by the
United Nations Special Envoy on Human Settlement Issues of July 2005, and to
repeal or amend Constitutional Amendment No 17 and provide an environment
conducive to constitutional reform on the basis of fundamental human
rights.

The 2002 fact-finding mission recommended that the
"activities of units within the ZRP like the Law and Order (unit) that seems
to operate under political instructions and without accountability to the
ZRP command structures, should be disbanded".

We have to do the unorthodox - Gono

RESERVE Bank of Zimbabwe governor Gideon Gono yesterday
defended the central bank's quasi-fiscal activities and said he would
continue to print money despite International Monetary Fund (IMF) protests
that this fuelled inflation.

Gono's remarks yesterday suggested
that government would continue to print money to fund its operations. This
comes just over two weeks after the IMF warned that Zimbabwe's inflation
could hit 6 000% by next year.

Inflation surged to 3 713,9% for
April, raising fears that it might rise well above the IMF's 6 000%
projection for next year before December. Gono said he would continue with
quasi-fiscal activities because he was operating under unique circumstances
such as the current economic crisis and the land reform exercise. Addressing
MPs in Harare on the role of the RBZ, Gono said the central bank's
interventionist measures - viewed as damaging by IMF and local economists -
would continue because government ministries had failed to carry out their
mandate.

"We offer no apology, we offer no remorse for our
intervention in all spheres of the economy, when we do the unorthodox," Gono
said. "We have to do the unorthodox, to go into those areas which
traditional economics written before World War Two sees as unorthodox," Gono
said.Gono said the central bank had come under pressure to source funding
for cash-starved government departments which had been failed by the
budgeting system.

"We say no to tradition and yes to conviction.
People are not interested in job descriptions. People are interested in
deliverables," Gono said.

He attacked senior government
officials for incompetence and corruption, which he said had forced him to
step in through quasi-fiscal activities.

"Those charged with
doing things are not doing so, and given the bird's eye view that the
central bank has, your governor has not been wanting to see people dying of
dysentery," Gono said, referring to the non-availability of water in some
suburbs.

His comments came on the day government released shocking
figures for inflation, which rose from 2 200% to 3 713,9% in the space of
one month.

In a working paper released last month and titled
Central bank quasi-fiscal losses and high inflation in Zimbabwe: A note, the
IMF accused the RBZ of fuelling the economic crisis through clandestine
quasi-fiscal activities.

The paper sought to rebut claims by
the RBZ that it had ring-fenced quasi-fiscal funding under a special purpose
vehicle called Fiscorp, after stinging IMF criticism that such funding be
accommodated in the budgetary process.

The working paper said
RBZ's subsidised credit, measures to mop up excess liquidity, foreign
exchange losses through subsidised exchange rates and multiple currency
practices had resulted in huge quasi-fiscal losses, which in turn resulted
in a huge surge in money supply.

"Quasi-fiscal losses of this sort,
rather than conventional monetary supply or fiscal laxity have mainly been
responsible for the surge in money supply during 2005-2007," the IMF said in
the paper.

According to the IMF, this helped fuel inflation to
unsustainable levels as the losses had endangered the control of monetary
targets, leading to injections of money.

The central bank was
linked to quasi-fiscal losses amounting to 75% of Zimbabwe's Gross Domestic
Product (GDP). This is far in excess of the global average of 10% for most
central banks. Zimbabwe's GDP is currently US$3,1 billion, meaning RBZ
induced quasi-fiscal losses are approximately US$2,3 billion.

The IMF paper also attacked sterilization operations by the central bank,
which started with 2004's 900% per annum Financial Treasury bills, which
were then replaced by the Open Market Operation (OMO) bills.

Introduced to absorb excess bank liquidity, these bills have managed to
accumulate "substantial domestic interest-bearing liabilities", with the net
interest cost of sterilizing operations amounting to 40% of GDP.

It
argued that while the RBZ could postpone the expansionary monetary effect
created through incurring debt - in the form of issued central bank bills -
debt issuance combined with valuation losses would lead to a deterioration
in RBZ's financial position and in turn contribute to future
losses.

Ncube scoops award

Zim Independent

ZIMBABWE Independent
publisher Trevor Ncube has won the 2007 IPA Freedom Prize in recognition of
his role in the furtherance of freedom of expression. Ncube will receive the
prize at the opening ceremony of the second Cape Town Book Fair on June
15.

The board of the International Publishers' Association (IPA)
selected Ncube from among many highly commendable candidates, nominated by
IPA members, individual publishers and human rights' organizations, said IPA
president Ana Maria Cabanellas, in the citation.

"Trevor
Ncube's work as a publisher and his wholehearted support of freedom of
expression have often brought him into conflict with Zimbabwean authorities
and endangered his personal safety.

"Despite repeated threats of
violence and attempts to strip him of his Zimbabwean citizenship, Ncube's
newspapers have continued to expose corruption and human rights abuses in
Zimbabwe, thus encouraging healthy dissent and criticism both in the public
and private sectors." - Staff Writer.

Urban poverty worries NGOs

Zim Independent

Lucia
Makamure

GOVERNMENT has come under attack from non-governmental
organisations for failing to live up to its promises to address the
impoverishment of thousands of urban dwellers by Operation Murambatsvina in
2005.

The criticism comes amid evidence that the slum clearance
operation was a major cause of urban poverty in the country which has
reached alarming rates with an estimated two million people requiring food
aid this year.

The National Association of Non-Governmental
Organisations (Nango), in its statement to mark the second anniversary of
the controversial clean-up exercise, expressed concern over the rise in
urban poverty.

"Exactly two years after the government initiated
Operation Murambatsvina, non-governmental organisations have expressed
concern over the unprecedented levels of urban poverty in Zimbabwe and
renewed calls for increased action to revamp the country's social service
delivery capacities," Nango said. "The tragedy is that the state has reneged
on its progressive commitments to providing health and education for all,"
it said.

Nango said local NGOs were battling to raise resources
from the international community to assist victims of Operation
Murambatsvina.

"Non-governmental organisations in the country have
been battling to raise resources from the international community that has
since expressed reservations with providing support to mitigate a man-made
crisis such as the post-Murambatsvina urban poverty scenario,"said
Nango.

Nango blamed the government for failure to address urban
poverty and for destroying the informal sector which used to be the source
of income for many urbanites.

"Nothing has been done by the
government to effectively address the impoverishment of thousands of urban
dwellers by Operation Murambatsvina. The destruction of the informal sector
from which urbanites derived their livelihoods has the overall effect of
reducing the standard of living in most households,"said Nango. It
added:

"The terrain of urban poverty in Zimbabwe has many
complexities, with HIV and Aids and economic recession playing a key role in
pushing more and more people into the relentless cycle of
poverty."

Operation Garikai which was government's only response to
the gross human rights violations perpetrated under Operation Murambatsvina
has failed dismally to reach the majority of the victims.

Under
the operation only 3 325 new houses were built with some having no access to
adequate safe water and sanitation yet Operation Murambatsvina left more
than 700 000 people homeless and affected an estimated 2,4 million people
countrywide.

USAid attributed the increase of urban poverty to high
unemployment rates, reduced real income and less government services which
have all contributed to a highly volatile situation, particularly in the
urban areas.

The government described the operation as a crackdown
against illegal housing and commercial activities and an effort to reduce
the risk of the spread of infectious diseases in urban areas.

However, in a report written by Anna Tibaijuka, the executive director of
the United Nations Human Settlements Programme, the operation was a
disastrous venture which violated international law and led to a serious
humanitarian crisis.

The report also described the actions of
the government as "indiscriminate, unjustified and conducted without regard
for human suffering".

A police
officer from Harare Central who gave his name as Inspector Chinembiri said
Hungwe was wanted for questioning in connection with a Standard front page
photograph on Sunday depicting the battered arm and thigh of Law Society
president Beatrice Mtetwa.

According to Hungwe, the police officer
demanded that he present himself at the police station, charging the picture
was a violation of the Public Order and Security Act (Posa).

"A
police officer from Harare Central who identified himself as Inspector
Chinembiri called me asking me to come down to the police station," said
Hungwe. "He said it was in connection with a front-page photograph in the
Standard."

This is not the first time the paper has been under
threat. Recently, Bill Saidi, the deputy editor of the Standard, received a
bullet in a hand-delivered envelope warning him to "watch out" after the
paper published a cartoon showing baboons poking fun at an army officer's
payslip. - Staff Writer.

Court orders cops off Matabeleland farm

THE Bulawayo High Court has ordered senior police
officers who invaded a farm owned by one of the few remaining white farmers
in Matabeleland North two months ago to vacate the property.

The relief order, granted by High Court judge Justice Francis Bere, says the
first respondent in the matter, Police Commissioner Augustine Chihuri, the
second respondent, Senior Assistant Commissioner Chivangire, and Home
Affairs minister Kembo Mohadi, should stop interfering with and harassing
the farm owner and his workers.

Police invaded Portwe Farm in March
and forcibly took keys to all the buildings on the farm. The owners of the
property, which includes a safari concern, J Joubert & Sons (Pvt) Ltd,
were told that the farm was "now a police state farm".

The
police proceeded to erect tents around the farm where they are now
camped.

Police also raided the gun cabinet and helped
themselves to an array of rifles used for hunting expeditions by guests at
the safari lodge situated on the farm.

Justice Bere said police
should immediately vacate the farm, return keys to the farm and firearms
they unlawfully confiscated when they invaded the property.

Western aid to Zim up

Zim Independent

Itai
Mushekwe

WESTERN governments this week increased financial aid to
Zimbabwe despite government's claims that European Union sanctions targeted
at President Robert Mugabe and his officials are responsible for the
economic decline.

The Swedish government on Tuesday disbursed
almost US$1 million for food security for HIV and Aids affected households
in Kwekwe rural and Gweru urban. The lifeline is being channeled through the
Swedish International Development Agency and will be administered by the
Swedish Cooperative Centre.

Goran Engstrand, the Swedish
Embassy head of development cooperation, said the HIV and Aids pandemic,
combined with various other problems "crippling" Zimbabwe, posed a "major
threat" to the country's development.

Australia also on Tuesday
unveiled a US$900 000 financial package to the United Nations Children's
Fund (Unicef) to bolster its National Action Plan for orphaned and
vulnerable children.

Australia has also raised its aid assistance.
Unicef spokesman, James Elder yesterday confirmed receipt of the financial
boost from the Australian government, saying it will go a long way in
assisting the United Nations body in undertaking the programme.

"The US$900 000 will be directed to the national programme for orphans,"
said Elder. "The money came to us directly from the Australian government,
and we're going to channel it to the affected communities."

NMB chief in Zurich in search of missing
cash

Zim Independent

Shame Makoshori

NMB Bank chief executive, David
Hatendi, flew into Zurich, Switzerland, on Sunday as the troubled financial
institution intensified the hunt to recover the US$4,7 million siphoned from
the bank by a syndicate of treasury staff, businessdigest heard this
week.

Hatendi is expected back in the country this morning and will
brief the Reserve Bank of Zimbabwe (RBZ) on his findings. Hatendi, whom
banking sources say is facing intense pressure from shareholders to quit, is
understood to have visited AKB Private Bank in the Swiss capital which has
been linked to the scam.

A company called Cardinal Finance
which is also at the centre of the current investigations kept an account
with AKB Private Bank where the stolen finds were alleged to have been
deposited. The AKB Private Bank account number is 16701690347.

The alleged ring-leader in the scam, Shame Mandara, has since fled the
country and is believed to be in the United States. NMB Bank sources said
this week that Hatendi's leadership has come under fierce scrutiny from the
central bank that has queried why the bank took so long to detect the porous
configuration of its risk management systems.

The local police
have asked for assistance from Interpol to help track down the suspects.
Sources said the NMB Bank chief had to seek clearance from the central bank
before leaving the country.

"He had to seek clearance from the
governor of the Reserve Bank (Gideon Gono) to go and try to look for leads
that can help the recovery of the missing money," a senior NMB Bank
executive told businessdigest. The executive added that officials from the
central bank had camped at NMB Bank headquarters in Harare going through its
books to find loopholes.

NMB Bank this week suspended officials in
the treasury department to facilitate the on-going investigations. The RBZ
is concerned that the transactions were approved by senior managers in the
treasury department. Businessdigest understands that the RBZ also wanted
officials from risk management and finance to be included in the
probe.

"Mandara was not a senior bank executive but an assistant
manager whose duty was to initiate the deals which he forwarded to treasury
managers for approval. But what the investigations have exposed is that all
of the managers signed the fraudulent transactions between 10 and 60 times
without questioning," said a source in the RBZ.

"So there is a
strong reason to believe that they were all part of the scam." This had
prompted Hatendi's decision to fly to that country.

The central
bank said in a statement this week the police anti-money laundering and
other international institutions were tracking the perpetrators of the fraud
and trying to establish the brains behind Cardinal Finance, the alleged
recipient of the stolen funds.

On Tuesday, the RBZ cancelled NMB's
foreign dealership status for the second time in four years for the
continued failure to adhere to sound risk management practices.

The central bank has also demanded an immediate reshuffle of the board and
management at NMB Bank.

Zim crisis scares off International Finance
Corporation

Zim Independent

Pindai Dube

THE deteriorating political
situation in Zimbabwe has forced the International Finance Corporation (IFC)
to rescind its decision to resume offshore credit lines support to the
country, officials in the Finance ministry confirmed.

Businessdigest established from the Ministry of Finance sources that
considerations by IFC to resume funding had taken a beating from the
escalating political situation in the country.

IFC, a private
arm of the World Bank, has snubbed Zimbabwe in its offshore credit lines for
the past seven years citing the deteriorating political and economic
environment.

The withdrawal of offshore credit lines was seen as
undermining the performance of key sectors of the economy.

The
permanent secretary in the finance ministry Willard Manungo confirmed that
the IFC had turned back its intention to resume funding to the
country.

"We have been hard done by owing to the rising political
situation in the country. There is no funding from the IFC again despite
considerations to resume. We don't know their position regarding to future
funding on investments," said Manungo.

Confederation of
Zimbabwe Industries (CZI) president Callisto Jokonya lamented that the
nation's economy had been hit by political crises, saying there is need for
Zimbabwe 'to put its house in order".

"For us to get access to the
IFC funds, we have to urgently put our house in order. No finance
institution will like to put funds where there is no order. We have to be
responsible at all costs and have dialogue," said Jokonya.

The
IFC had since 1980 availed more than US$600 million to private sector
investments in the fields of mining, agriculture, tourism, and manufacturing
among others.

However it disinvested its shares in several local
companies as tension between Zimbabwe and the Bretton Woods instuition
worsens.

According to the IFC, Zimbabwe which used to account for
huge chunk from the instuition's financial support in Sub-Saharan African
has been overtaken by Zambia and Mozambique.

On Monday IFC
announced that it will invest US$1,8 million in Protea Arcades Ltd, a
subsidiary of Union Gold (Zambia) to help meet the growing demand for
quality accommodation in that country's capital, Lusaka.

But it was
now cautious on future investment in the country citing risks such as a four
figure inflation, high unemployment and a volatile economic
climate.

Causes and cost of inflation

Zim Independent

Zimbabwe's
government blames private businesses and greed for galloping inflation.
Price controls and outright threats have been used to stop businesses from
raising prices, but inflation has not slowed down. This article looks at
some of the challenges countries face when trying to reduce
inflation.

By David Ranson

INFLATION is
the loss in purchasing power of a currency unit, usually expressed as a
general rise in the prices of goods and services.

A classic example
is the Great Inflation of the Roman Empire. Successive emperors replaced a
steadily increasing fraction of the silver in their ancient currency, the
denarius, with base metals like bronze or copper. As a result prices rose
inexorably despite repeated attempts to restrain them through legislation.
Diocletian, rather than taking responsibility for the debasement, attributed
the rapid inflation of his day to the avarice of his subjects.

His famous edict of AD 301 threatened with death any vendor who charged
prices exceeding official limits. But inflation ran along unhindered for
another century until an alternative currency, an undepreciated gold coin
known to Shakespeare as the bezant, became the customary unit of account,
spreading throughout Europe and lasting well into the Middle Ages.

In modern times inflation continues to be blamed on private greed, and
governments still seek to restrain it by decree, sometimes even devaluing
their currencies as they do so.

We have many measures of
inflation, but none provides a truly reliable gauge of inflation at any
specific time. The most widely watched measure is the consumer price index
(CPI), published monthly in most countries.

The problem with the
CPI is that the weight attached to each class of goods and services is held
constant for years at a time. Therefore, when consumers lower their cost of
living by buying more items whose relative price has fallen and fewer items
whose relative price has risen, the CPI will not show a decline in the cost
of living.

Moreover, the difficult problem of allowing for changing
quality has never been solved. Nor can the government inspectors who collect
the data from retailers track down all the sales and discounts of which
consumers are so keenly aware. As a result of these and other factors, the
consumer price index reflects inflation trends only with a long delay and
portrays an artificially smooth path for the inflation rate.

Other indicators of inflation include producer prices and unit-value indexes
for imports and exports. As we move back through the distribution chain from
the consumer toward the supplier of raw materials, a more jumpy picture of
inflation is revealed at each step.

In the news media, discussion
of inflation often takes a "bottom up" view. Each month's change in the CPI
can be, and is, split up into dozens of components, such as food, energy and
housing. It is tempting to see the sectors where prices rose the most as
causes of the observed inflation. This way of looking at inflation is
mistaken. The prices of some items always are rising or falling relative to
others. Surely inflation is not simply the sum total of a collection of
independent price changes, as the arithmetic of the CPI implies. It is the
degree to which all of the prices move in concert.

What does
inflation cost? Economists who view inflation as a very serious problem
point to what they call the "inflation tax". By this they mean the reduction
in the purchasing power of the cash balances held by the private sector -
like a wealth tax. This tax is a drag on the economy - an "efficiency loss"
- because it induces people and businesses to economise on cash balances,
making it more difficult to participate in the money economy.

Economic losses associated with the inflation tax and other distortions are
known as the "welfare cost of inflation." At one extreme of the debate,
Harvard economist Martin Feldstein has claimed that the present value of the
losses that result from unending inflation may be infinite! His argument is
that each year the cost to the economy grows in proportion to society's
money balances. Because the rate of growth of money balances exceeds the
interest rate he uses to calculate the present value, the present value is
unbounded.

The increase in government spending could be claimed as
either a cost or a benefit to the economy, depending on whether one wants
more or less government spending. But there is a real cost that is not
ambiguous. High tax rates on employment, on business investment, and on the
accumulation of capital deter all these activities in favor of untaxed uses
of the economy's resources and, therefore, impede output and
growth.

Still more difficult than measuring inflation is the
problem of identifying its root causes. In spite of its long and rich
history, few subjects in the field of economics are more confused.
Professional economists have still not reached broad agreement as to the
origins of the inflation process.

Two camps dominate the
debate. Some see inflation as a malady of the currency (as was surely the
case in the Roman Empire). In the words of Milton Friedman: "Inflation is
always and everywhere a monetary problem." Others see nonmonetary forces at
work, such as monopolies, union demands for higher wages, oil politics, or
the "wage-price spiral".

Some nonmonetary ideas are illogical. The
existence of monopoly power or union power might be argued to raise prices
generally relative to what they otherwise would be. But a continuing price
rise year-in year-out requires a continuing increase in the degree of
monopoly or union power in the economy. This is neither plausible over long
periods of time, nor consistent with evidence from recent decades for the
United States.

Nonmonetary theories of inflation traditionally
separate "demand-pull" sources from "cost-push" factors like oil, monopoly
power, or wages. A surge in the demand for goods and services in general
("aggregate demand") is thought to "pull" prices up across the board,
especially when "aggregate supply" is held back by inertia or capacity
limitations. Sceptics rightly question how demand could constantly outstrip
supply. Surely, demand must originate from purchasing power, purchasing
power from wealth, wealth from income, and income from the ability to
produce (and hence supply) goods and services.

Other logical
objections to the idea of demand-pull inflation center on the importance of
money. How could prices rise without a commensurate increase in the quantity
of money in private hands? If such a thing happened, the purchasing power of
the quantity of money would have declined involuntarily, and that would not
be consistent with market equilibrium. Economists of the "monetarist" school
emphasize the power and discretion of government to vary the money supply,
causing private markets to bring the economy's price structure into
conformity.

Among those who attribute inflation to monetary causes,
at least two quite different views exist. The monetarist view is that
increases in the quantity of money cause inflation. Critics of this view
point out that the quantity of money is difficult to define, especially when
funds can be transferred electronically and credit cards can substitute for
cash balances. It can also be argued that people have freedom to choose the
quantity of money they want to hold rather than merely accept the quantity
the government wishes to impose upon them.

The other monetary
view, held historically by opponents of fiat (ie, government) paper money,
and by advocates today of restoring the gold standard, is that the quantity
of money can take care of itself. What really is needed, according to this
view, is a mechanism for keeping the price of the currency stable, for
providing an anchor, so to speak.

Governments have been slow to
accept the recommendations of either of these camps. That probably is
because either a strict monetary rule or strict adherence to a gold standard
or other price rule would place strict limits on discretionary government
management of the economy.

* David Ranson is president of HC
Wainwright and Company, Economics, an investment research firm in Boston. He
was formerly an assistant to the secretary of the Treasury in
Washington.

When the inflation floodgates open

Zim Independent

By
Michael K Salemi

INFLATION is a sustained increase in the
aggregate price level. Hyperinflation is very high inflation. Although the
threshold is arbitrary, economists generally reserve the term hyperinflation
to describe episodes where the monthly inflation rate is greater than 50%.
At a monthly rate of 50%, an item that cost $1 on January 1 would cost $130
on January 1 of the following year.

Hyperinflations are largely
a 20-century phenomenon. The most widely studied hyperinflation occurred in
Germany after World War I. The ratio of the German price index in November
1923 to the price index in August 1922 - just 15 months earlier - was 1.02 ×
1010. This huge number amounts to a monthly inflation rate of 322%. On
average, prices quadrupled each month during the 16 months of
hyperinflation.

While the German hyperinflation is better known, a
much larger hyperinflation occurred in Hungary after World War II. Between
August 1945 and July 1946 the general level of prices rose at the astounding
rate of over 19 000% per month, or 19% per day.

Even these very
large numbers understate the rates of inflation experienced during the worst
days of the hyperinflations. In October 1923, German prices rose at the rate
of 41% per day. And in July 1946, Hungarian prices more than tripled each
day.

What causes hyperinflations?

No one-time shock,
no matter how severe, can explain sustained (i.e., continuously rapid) price
growth. The world wars themselves did not cause the hyperinflations in
Germany and Hungary. The destruction of resources during the wars can
explain why prices in Germany and Hungary would be higher after them than
before. But the wars themselves cannot explain why prices would continuously
rise at rapid rates during the hyperinflation periods.

Hyperinflations are caused by extremely rapid growth in the supply of
"paper" money. They occur when the monetary and fiscal authorities of a
nation regularly issue large quantities of money to pay for a large stream
of government expenditures. In effect, inflation is a form of taxation where
the government gains at the expense of those who hold money whose value is
declining. Hyperinflations are, therefore, very large taxation
schemes.

During the German hyperinflation the number of German
marks in circulation increased by a factor of 7.32 × 109. In Hungary, the
comparable increase in the money supply was 1.19 × 1025. These numbers are
smaller than those given earlier for the growth in prices.

In
hyperinflations prices typically grow more rapidly than the money stock
because people attempt to lower the amount of purchasing power that they
keep in the form of money. They attempt to avoid the inflation tax by
holding more of their wealth in the form of physical commodities. As they
buy these commodities, prices rise higher and inflation
accelerates.

Hyperinflations tend to be self-perpetuating. Suppose
a government is committed to financing its expenditures by issuing money and
begins by raising the money stock by 10% per month. Soon the rate of
inflation will increase, say, to 10% per month. The government will observe
that it can no longer buy as much with the money it is issuing and is likely
to respond by raising money growth even further. The hyperinflation cycle
has begun. During the hyperinflation there will be a continuing tug-of-war
between the public and the government. The public is trying to spend the
money it receives quickly in order to avoid the inflation tax; the
government responds to higher inflation with even higher rates of money
issue.

How do hyperinflations end?

The standard answer
is that governments have to make a credible commitment to halting the rapid
growth in the stock of money. Proponents of this view consider the end of
the German hyperinflation to be a case in point.

In late 1923,
Germany undertook a monetary reform creating a new unit of currency called
the rentenmark. The German government promised that the new currency could
be converted on demand into a bond having a certain value in gold.
Proponents of the standard answer argue that the guarantee of convertibility
is properly viewed as a promise to cease the rapid issue of
money.

An alternative view held by some economists is that not
just monetary reform, but also fiscal reform, is needed to end a
hyperinflation. According to this view a successful reform entails two
believable commitments on the part of government.

The first is
a commitment to halt the rapid growth of paper money. The second is a
commitment to bring the government's budget into balance. This second
commitment is necessary for a successful reform because it removes, or at
least lessens, the incentive for the government to resort to inflationary
taxation.

Thomas Sargent, a proponent of this second view, argues
that the German reform of 1923 was successful because it created an
independent central bank that could refuse to monetise the government
deficit and because it included provisions for higher taxes and lower
government expenditures.

What effects do hyperinflations
have?

One effect with serious consequences is the reallocation of
wealth. Hyperinflations transfer wealth from the general public, which holds
money, to the government, which issues money.

Hyperinflations
also cause borrowers to gain at the expense of lenders when loan contracts
are signed prior to the worst inflation. Businesses that hold stores of raw
materials and commodities gain at the expense of the general
public.

In Germany, renters gained at the expense of property
owners because rent ceilings did not keep pace with the general level of
prices. Costantino Bresciani-Turroni has argued that the hyperinflation
destroyed the wealth of the stable classes in Germany and made it easier for
the National Socialists (Nazis) to gain power.

Hyperinflation
reduces an economy's efficiency by driving agents away from monetary
transactions and toward barter. In a normal economy great efficiency is
gained by using money in exchange.

During hyperinflations people
prefer to be paid in commodities in order to avoid the inflation tax. If
they are paid in money, they spend that money as quickly as possible. In
Germany workers were paid twice per day and would shop at midday to avoid
further depreciation of their earnings. Hyperinflation is a wasteful game of
"hot potato" where individuals use up valuable resources trying to avoid
holding on to paper money.

The recent examples of very high
inflation have mostly occurred in Latin America. Argentina, Bolivia, Brazil,
Chile, Peru, and Uruguay together experienced an average annual inflation
rate of 121% between 1970 and 1987. One true hyperinflation occurred during
this period. In Bolivia prices increased by 12 000% in 1985. In Peru in
1988, a near hyperinflation occurred as prices rose by about 2 000% for the
year, or by 30% per month.

The Latin American countries with high
inflation also experienced a phenomenon called "dollarisation".
Dollarisation is the use of US dollars by Latin Americans in place of their
domestic currency. As inflation rises, people come to believe that their own
currency is not a good way to store value and they attempt to exchange their
domestic money for dollars.

In 1973, 90% of time deposits in
Bolivia were denominated in Bolivian pesos. By 1985, the year of the
Bolivian hyperinflation, more than 60% of time deposit balances were
denominated in dollars.

What caused high inflation in Latin
America? Many Latin American countries borrowed heavily during the 70s and
agreed to repay their debts in dollars. As interest rates rose, all of these
countries found it increasingly difficult to meet their debt-service
obligations. The high-inflation countries were those that responded to these
higher costs by printing money.

The Bolivian hyperinflation is
a case in point. Eliana Cardoso explains that in 1982 Hernan Siles-Suazo
took power as head of a leftist coalition that wanted to satisfy demands for
more government spending on domestic programmes but faced growing
debt-service obligations and falling prices for its tin exports. The
Bolivian government responded to this situation by printing money. Faced
with a shortage of funds, it chose to raise revenue through the inflation
tax instead of raising income taxes or reducing other government
spending.

* Michael K Salemi is an economics professor at the
University of North Carolina in Chapel Hill.

When the inflation floodgates open

Zim Independent

By
Michael K Salemi

INFLATION is a sustained increase in the
aggregate price level. Hyperinflation is very high inflation. Although the
threshold is arbitrary, economists generally reserve the term hyperinflation
to describe episodes where the monthly inflation rate is greater than 50%.
At a monthly rate of 50%, an item that cost $1 on January 1 would cost $130
on January 1 of the following year.

Hyperinflations are largely
a 20-century phenomenon. The most widely studied hyperinflation occurred in
Germany after World War I. The ratio of the German price index in November
1923 to the price index in August 1922 - just 15 months earlier - was 1.02 ×
1010. This huge number amounts to a monthly inflation rate of 322%. On
average, prices quadrupled each month during the 16 months of
hyperinflation.

While the German hyperinflation is better known, a
much larger hyperinflation occurred in Hungary after World War II. Between
August 1945 and July 1946 the general level of prices rose at the astounding
rate of over 19 000% per month, or 19% per day.

Even these very
large numbers understate the rates of inflation experienced during the worst
days of the hyperinflations. In October 1923, German prices rose at the rate
of 41% per day. And in July 1946, Hungarian prices more than tripled each
day.

What causes hyperinflations?

No one-time shock,
no matter how severe, can explain sustained (i.e., continuously rapid) price
growth. The world wars themselves did not cause the hyperinflations in
Germany and Hungary. The destruction of resources during the wars can
explain why prices in Germany and Hungary would be higher after them than
before. But the wars themselves cannot explain why prices would continuously
rise at rapid rates during the hyperinflation periods.

Hyperinflations are caused by extremely rapid growth in the supply of
"paper" money. They occur when the monetary and fiscal authorities of a
nation regularly issue large quantities of money to pay for a large stream
of government expenditures. In effect, inflation is a form of taxation where
the government gains at the expense of those who hold money whose value is
declining. Hyperinflations are, therefore, very large taxation
schemes.

During the German hyperinflation the number of German
marks in circulation increased by a factor of 7.32 × 109. In Hungary, the
comparable increase in the money supply was 1.19 × 1025. These numbers are
smaller than those given earlier for the growth in prices.

In
hyperinflations prices typically grow more rapidly than the money stock
because people attempt to lower the amount of purchasing power that they
keep in the form of money. They attempt to avoid the inflation tax by
holding more of their wealth in the form of physical commodities. As they
buy these commodities, prices rise higher and inflation
accelerates.

Hyperinflations tend to be self-perpetuating. Suppose
a government is committed to financing its expenditures by issuing money and
begins by raising the money stock by 10% per month. Soon the rate of
inflation will increase, say, to 10% per month. The government will observe
that it can no longer buy as much with the money it is issuing and is likely
to respond by raising money growth even further. The hyperinflation cycle
has begun. During the hyperinflation there will be a continuing tug-of-war
between the public and the government. The public is trying to spend the
money it receives quickly in order to avoid the inflation tax; the
government responds to higher inflation with even higher rates of money
issue.

How do hyperinflations end?

The standard answer
is that governments have to make a credible commitment to halting the rapid
growth in the stock of money. Proponents of this view consider the end of
the German hyperinflation to be a case in point.

In late 1923,
Germany undertook a monetary reform creating a new unit of currency called
the rentenmark. The German government promised that the new currency could
be converted on demand into a bond having a certain value in gold.
Proponents of the standard answer argue that the guarantee of convertibility
is properly viewed as a promise to cease the rapid issue of
money.

An alternative view held by some economists is that not
just monetary reform, but also fiscal reform, is needed to end a
hyperinflation. According to this view a successful reform entails two
believable commitments on the part of government.

The first is
a commitment to halt the rapid growth of paper money. The second is a
commitment to bring the government's budget into balance. This second
commitment is necessary for a successful reform because it removes, or at
least lessens, the incentive for the government to resort to inflationary
taxation.

Thomas Sargent, a proponent of this second view, argues
that the German reform of 1923 was successful because it created an
independent central bank that could refuse to monetise the government
deficit and because it included provisions for higher taxes and lower
government expenditures.

What effects do hyperinflations
have?

One effect with serious consequences is the reallocation of
wealth. Hyperinflations transfer wealth from the general public, which holds
money, to the government, which issues money.

Hyperinflations
also cause borrowers to gain at the expense of lenders when loan contracts
are signed prior to the worst inflation. Businesses that hold stores of raw
materials and commodities gain at the expense of the general
public.

In Germany, renters gained at the expense of property
owners because rent ceilings did not keep pace with the general level of
prices. Costantino Bresciani-Turroni has argued that the hyperinflation
destroyed the wealth of the stable classes in Germany and made it easier for
the National Socialists (Nazis) to gain power.

Hyperinflation
reduces an economy's efficiency by driving agents away from monetary
transactions and toward barter. In a normal economy great efficiency is
gained by using money in exchange.

During hyperinflations people
prefer to be paid in commodities in order to avoid the inflation tax. If
they are paid in money, they spend that money as quickly as possible. In
Germany workers were paid twice per day and would shop at midday to avoid
further depreciation of their earnings. Hyperinflation is a wasteful game of
"hot potato" where individuals use up valuable resources trying to avoid
holding on to paper money.

The recent examples of very high
inflation have mostly occurred in Latin America. Argentina, Bolivia, Brazil,
Chile, Peru, and Uruguay together experienced an average annual inflation
rate of 121% between 1970 and 1987. One true hyperinflation occurred during
this period. In Bolivia prices increased by 12 000% in 1985. In Peru in
1988, a near hyperinflation occurred as prices rose by about 2 000% for the
year, or by 30% per month.

The Latin American countries with high
inflation also experienced a phenomenon called "dollarisation".
Dollarisation is the use of US dollars by Latin Americans in place of their
domestic currency. As inflation rises, people come to believe that their own
currency is not a good way to store value and they attempt to exchange their
domestic money for dollars.

In 1973, 90% of time deposits in
Bolivia were denominated in Bolivian pesos. By 1985, the year of the
Bolivian hyperinflation, more than 60% of time deposit balances were
denominated in dollars.

What caused high inflation in Latin
America? Many Latin American countries borrowed heavily during the 70s and
agreed to repay their debts in dollars. As interest rates rose, all of these
countries found it increasingly difficult to meet their debt-service
obligations. The high-inflation countries were those that responded to these
higher costs by printing money.

The Bolivian hyperinflation is
a case in point. Eliana Cardoso explains that in 1982 Hernan Siles-Suazo
took power as head of a leftist coalition that wanted to satisfy demands for
more government spending on domestic programmes but faced growing
debt-service obligations and falling prices for its tin exports. The
Bolivian government responded to this situation by printing money. Faced
with a shortage of funds, it chose to raise revenue through the inflation
tax instead of raising income taxes or reducing other government
spending.

* Michael K Salemi is an economics professor at the
University of North Carolina in Chapel Hill.

IMF projects 6 000% inflation by end 2008

Zim Independent

Paul Nyakazeya

THE International Monetary Fund (IMF) has
projected that Zimbabwe's year-on-year inflation could reach 6 470% by
December 2008 as the country's economic crisis continues to accelerate at an
unprecedented rate.

The Bretton Woods institution had initially
projected that the country's inflation would reach 5 000% by
year-end.

In its World Economic Outlook for April 2007, the IMF
said the country's inflation, currently at 3 714% for April, would reach 6
470,8% by the end of next year.

According to the IMF, with the
current year-on-year inflation at 3 714%, it means the "realistic" inflation
rate for March is above 7 400%.

IMF's projection of 6 470,8% by
December next year would mean Zimbabwe's "realistic" inflation rate would be
above 12 500% by the end of next year.

In a working paper titled
Lesson from high inflation episodes for stabilising the economy in Zimbabwe
released by the IMF last month, Zimbabwe's inflation was said to be double
the official figures because half the products in the basket used to measure
the Consumer Price Index (CPI) were controlled by government.

"Many in the private sector believe that the true rate of annual inflation
was closer to 3 000% in February 2007," the IMF added.

The IMF said
Zimbabwe's real GDP has declined by about 30% since 1999 due to poor
policies implemented by government.

These include the price
controls which have triggered massive price distortions. The government had
refused to implement IMF's recommendation to let the market determine the
exchange rate.

The official value of the dollar has been pegged at
$250 to the greenback since July last year. On the parallel market the
dollar is trading above $32 000 to the US unit.

Investor
confidence has collapsed as a result of the unpredictable policies and lack
of respect for property rights in the mining and agriculture sectors, and
the minimal external financing emanating from government's poor relations
with creditors and donors who President Robert Mugabe has repeatedly told to
back off insisting that Zimbabwe will "go it alone".

The IMF
also predicted a 5,7% reduction in the Gross Domestic Product (GDP) this
year and a further shrinkage of 3,6% for next year as Zimbabwe's seven-year
old economic recession continues unabated.

History repeats itself at NMB

Zim Independent

Shame
Makoshori

A mission statement on NMB Holdings' website says the
financial institution will be driven by integrity, client satisfaction and
thrive to increase shareholder value. The situation on the ground however
reveals a totally different picture. The financial institution's 14 years of
existence expose a history littered with fraud allegations, alleged poor
corporate governance practices and perennial clashes with regulators that
have spanned half a decade.

During the banking crisis of 2003
the Reserve Bank of Zimbabwe (RBZ) moved swiftly to cancel the bank's
foreign currency dealership status arguing depositors' funds were endangered
by the illegal trade by executives on the parallel market.

Although NMB appealed against the suspension and won the licence back the
incident marked the beginning of perennial clashes between the embattled
bank and authorities that culminated in fiercely denied rumours that the
Zimbabwe Stock Exchange (ZSE) planned to suspend the financial institution
as news trickled down that top managers had feasted on billions of
depositors' funds.

In March 2004 Eland Park Residents
Association in Harare accused NMB of conniving with one of the directors of
liquidated ENG Asset Management Company, Gilbert Muponda, to allegedly
defraud their trust account of $2,5 billion - a huge amount then. Eland Park
chairman Edward Tome argued that they strongly suspected that ENG was an
extension of the NMB.

Apparently, Muponda who allegedly defrauded
ENG investors of $60 billion in 2004 had a stint with NMB before moving out
to start his asset management company. The court case on allegations that he
defrauded depositors of $60 billion has not been finalised.

Just as the dust was settling police reported in September 2004 that they
were investigating an NMB clerk, Justin Kusaranyare, for a $144 million
fraud. The matter was later brought before the courts.

Then in
a watershed case involving NMB's short but controversially eventful
corporate life four of its top directors Julius Makoni, Otto Chekeche, James
Mushore and Francis Zimuto hit headlines when they fled Zimbabwe after
police launched a manhunt as rumours swelled that they had allegedly
externalised $30 billion from the bank into UK registered LTB Money
Transfer. They have lived in the UK since then and denied any
wrongdoing.

The allegation of fraud prompted a massive run on
deposits as sceptical depositors and investors feared their funds would be
locked up should the central bank have decided to shut down
NMB.

Trust Bank, Royal Bank, Time Bank and Barbican Bank had
succumbed to stringent RBZ demands for best corporate practices and
shareholders had to helplessly watch their investments going down the drain.
NMB shareholders and depositors breathed a huge sigh of relief when, instead
of applying an iron hand, the central bank chose a more conciliatory path,
demanding the complete overhaul of the bank's board and top management and
embark on a turnaround track that would extinguish the raging
fires.

Top banker David Hatendi was appointed chief executive and a
completely fresh board came in to drive the bank back to stability and win
back market confidence.

It looked stable when the bank reported
that net interest income for the year ended December 31, 2006 surged
significantly to $8,6 billion from $285 million in 2005 while post tax
profits were $6,9 billion up from $352 million.

During the
first quarter of 2006 Hatendi told analysts they had made great strides in
exorcising the bad spirits that had rocked NMB and a recapitalisation
exercise carried out then was bearing fruit.

"The bank's capital
base has increased well above the new minimum paid up capital requirement of
$100 billion, it has restructured and has embarked on a rationalisation
programme, addressing inefficiencies, cost structures and recapitalisation,"
Hatendi said while presenting the 2005 annual report.

The Global
Credit Rating Company (GCR) also weighed in NMB's favour giving it a clean
bill of health and projecting a positive rating outlook. Great news for the
market!

But Hatendi was not aware then that history was repeating
itself. An assistant manager in the treasury department, Shame Mandara, was
already illegally gnawing through the financial institution's foreign
currency coffers which totalled US$4,7 million last week. The money which
belonged to NGOs, embassies, exporters and individuals was transferred into
numerous offshore accounts in Swiss banks.

Mandara left his
jacket on the chair and fled the country, leaving NMB executives globe
trotting looking for possible leads especially in Swiss banks. Hatendi is
currently in Switzerland investigating the fraud that has caused upheavals
at the bank.

Inflation higher than official figures

Zim Independent

Martin Tarusenga

EVERYONE in Zimbabwe now worries about whether
or not the money they hold will be able to buy the goods they want
tomorrow.

The money could be cash holdings, a bank deposit, an
investment with a stockbroker, etc, with prices of goods continuously
increasing and in enormous hikes, we worry about whether or not we will be
able to buy the same things budgeted for.

There are therefore
continuous searches for methods of converting all these various types of
money holdings into "something" that can later be traded back to the
Zimbabwean dollars.

The one now apparently common method used to
protect against inflation is to convert to the foreign currency. But then
this is illegal - there is a high risk of being made an
example.

With a little financial innovation and financial
engineering, there's however a host of possibilities to protect our money
from inflation, provided, there's available sufficiently responsive and
transparently managed inflation indices.

Based on these indices
and established financial theory, the past two decades has, in developed
economies, seen an explosion of ingenious methods to meet the various
financial needs of consumers including inflation protection.

To
mention but a few, the UK RPI indexed Index Linked Gilts (ILG's) are a very
popular investment in periods of high inflation or when high inflation is
expected. The US has Treasury Inflation-Protected Securities similarly
indexed.

Indeed the object of the erstwhile RBZ CPI bonds was on
the face of just that - to protect against inflation.

In our
inflationary economy we would be a step closer towards accessing these
inflation instruments with available sufficiently responsive and
transparently managed inflation indices. The established measure of
inflation in Zimbabwe is the Consumer Price Index (CPI) managed by the
Central Statistical Office (CSO).

Questions have recently been
raised on the CPI responsiveness and management transparency. The Zimbabwe
Independent (May 11) reports some dissenting opinions regarding the
effectiveness of the CSO CPI in tracking inflation in Zimbabwe. The delayed
publication of the latest CPI figures lends good credence to these
suspicions.

There are several simple ways to check the practicality
and hence efficiency of CPI in tracking the pace and level of increases in
prices of goods that we purchase and whether in fact it is protecting our
money to the extent it is used to prove achievement of financial performance
over and above inflation. Inflation indices must have certain
characteristics and must be managed very transparently.

For
starters the pace and level with which our CPI progresses must bear
plausible relationships with both domestic and international prices
including interest rates as the price of money and exchange rates as the
price of other currencies in our currency.

First considering
exchange rate relationships - an exchange rate of one US$1:$30 000 measures
in part how much of a US good (say one litre of fuel) is paid in the US
relative to the price paid of the same good in Zimbabwe - so called
Purchasing Power Parity in economics.

The progression of the Zim
dollar exchange rate is in fact a reflection of the progression of real
prices on the ground in Zimbabwe relative to prices of the same good in the
US dollars. It can be observed that the parallel exchange rate of one US
dollar moved from about $2 900 at the end of December 2006 to about $30 000
as of to date, ie: the price level of goods purchased in the US remained at
US$1 end of December 2006 and May 2007, while the price level for the same
goods over the same period in Zimbabwe moved in relative terms, from $2 900
to $29 000, representing 25 000% inflation per annum.

This does
not compare to the 2 200,2% (3 700% announced yesterday) inflation per annum
reflected by the CPI. Note here that reference is to "real prices on the
ground" that real people, regardless, pay in response to demand supply
fundamentals when contrasted to the more artificial controlled
prices.

Let's however assume the RBZ controlled exchange rates
are in operation, comparing the previous exchange rate of $250 to the
current seller exchange rate of $15 000 gives an annual inflation rate of 1
851 567%!

The exchange rate for the others which remained at
$250 says that there is no inflation in Zimbabwe! The CPI inflation bears no
relationship to any one of these inflation figures. The sums don't quite add
up here, with the CPI falling out of reality - to the extent that people are
apparently using the US dollar and other hard currencies to hedge against
inflation.

If next we consider how the speed and level of
prices of goods commonly purchased progress, it will be observed that they
are higher than the speed and level of the CPI progression. The table below
shows some preliminary data on price changes of a selection of goods from a
survey in-progress between 31 December 2006 and 14 May 2007. This selection
of goods takes into account the consumption shifts towards essentials in
periods of economic recession.

The table shows goods price
increases reflecting an inflation rate well over the 2 200,2% estimated by
the CPI. If these prices on the ground are anything to go by, the CPI is
clearly rendered kaput, having no relationship whatsoever to the inflation
on the ground. Note that this is not a rigorous index evaluation but one
does not have to eat the whole ox to ascertain how tasty the beast
is.

If lastly we take the interest we receive on $100 per year, as
pegged by the RBZ, to be the price of a holding of $100, the pace and level
at which the RBZ pegged rates change must reflect inflation in Zimbabwe and
therefore have a reasonable relationship with CPI changes.

The
interest rates as pegged by the RBZ are currently averaging 700%, that is
the price of $100 is averaging $700 per year, having moved from 600% that
is, a price of $600 for $100. This represents an inflation rate of 45%.
Again quite different from the CPI inflation of 2 200,2%.

Additionally the nominal interest rates pegged by the RBZ must be the sum of
the annual inflation reflected by the CPI and the real rate of return from
government issued debt, assuming this investment is default free. With
interest rates currently pegged at an average rate of 700% and assuming a
CPI inflation rate of 2 200,2%, government issued debt is in real terms
yielding negatively at -1 500,2%, ie for every $100 invested in government
debt one looses $1 500,2 over the year, of the buying power of the initial
$100 investment assuming the 2 200,2%. The purchasing power lost is much
more if inflation is higher than that estimated by CPI as these rough
estimates and checks suggest.

If these manifestations of the
CPI deficiencies are anything to go by, they lead us to conclude that the
CSO CPI inflation is much lower than inflation on the ground. What's worse
all the CPI inflation adjusted financial results recently published by banks
and other corporations are not a reflection of the real corporate
performance - the corporate performances could be negative.

6m kg tobacco auctioned

Zim Independent

Paul
Nyakazeya

AT Least 6, 35 million kg of flue-cured tobacco
valued at US$11,7 million (about $2,9 billion at the interbank rate) have
gone under the hammer at the country's three auction floors since the
beginning of the selling season on April 24.

Figures obtained
from the Tobacco Industry and Marketing Board (TIMB) yesterday revealed that
the deliveries were 83,25% more than the 3, 46 million which went under the
hammer during the first two weeks of trade last year.

In
monetary terms last year's sales for the same period were 416,42% less at
$567,3 million in Zimbabwe dollar terms due to hyperinflation. Inflation
which is currently at 3 714,2% for April was 1092% during the same period
last year.

In US dollars terms the value of tobacco sold is US$11,7
million, 102,43% more than US$5,7 million sold during the same period last
year.

A total of 68 371 bails have gone under the hummer so far
from, 88,12%% more than 36 345 which were sold during the corresponding
period last year, the TIMB said.

Govt biggest forex spender

Zim Independent

THE Reserve
Bank of Zimbabwe governor, Gideon Gono, yesterday told parliamentarians that
government was the biggest beneficiary of foreign currency generated by the
country over the past three years. He was responding to parliamentarians who
said government and key parastatals were not getting currency from the
central bank.

Foreign exchange allocation to priority sectors since
2004 show government received a total of US$868 million. Noczim was the
second largest recipient with US$587 million while Zesa got US$249 million.
The Grain Marketing Board was allocated US$259 million while troubled Air
Zimbabwe got US95 million.

The figures show government received
US$67,1 million in the first quarter.

Gono dismissed calls by
some parliamentarians for the government set up committees to allocate
foreign currency saying this would not help the situation. "It is therefore,
illogical and misguided for some sections of the society to recommend to
government the formation of foreign exchange committees thinking that would
in itself solve the prevailing foreign currency shortages," Gono said. -
Staff writer.

'Zim will become a military state if left
unchecked'

STATE brutality against
human rights defenders, civic groups and opposition supporters needs to be
checked before the country degenerates into a military state, observers said
this week.

Analysts said there are prospects of an increase in
human rights violations and brutality against dissenting voices in Zimbabwe,
especially in the run-up to the 2008 joint elections if rogue elements in
the security forces are not stopped right away.

"The continued
repression is shameful and a sad subjugation of citizens' rights," one
analyst said. "It is a stark representation of the breakdown of the rule of
law. A serious government respects its citizens and should not engage in
random acts of thuggery against those who seek to defend the rights of
individuals."

The analyst said Zimbabweans must be wondering who
will defend them if the state agencies have become gangsters who subject
members of the public to routine harassment.

"It is very clear
that state machinery such as the police have become so politicised to the
extent that all semblance of professionalism is sacrificed in an attempt to
prop up the Zanu PF government," the analyst said.

Southern
African Development Community (Sadc) leaders have called on the Zimbabwean
authorities to stop the abuses. Sadc presidents of law societies last week
flew into the country to persuade government to stop rampant human right
abuses by state agents and restore respect for the rule of law.

The visiting lawyers held meetings with senior police officers, the Attorney
General, the permanent secretary in the Ministry of Justice, Chief Justice
Godfrey Chidyausiku and the Judge President Rita Makarau.

In an
unprecedented move, the Pan African Parliament last Friday decided to send a
fact-finding mission to investigate allegations of the abduction or murder
of opposition activists, and detentions of journalists and violations of
freedom of speech.

Despite lobbying by Zanu PF legislators Rugare
Gumbo, Chief Fortune Charumbira and Sheila Mahere, the PAP voted
overwhelmingly for the mission to Zimbabwe with 149 members approving the
motion while 20 opposed it. Charumbira argued that the decision to send a
mission to Zimbabwe was misguided, as there were far worse countries on the
continent than Zimbabwe.

"It seems the situation in Zimbabwe is
being exaggerated. There are other countries where people are being killed
and that is ignored but the moment someone cries in Zimbabwe, it is made an
issue. We see an external hand," he said.

The mission to
Zimbabwe, expected in a few weeks, would be the first fact-finding mission
to investigate human rights in the country since the United Nations sent a
special envoy in 2005 to assess the destruction caused by Operation
Murambatsvina.

Analysts said recent events that saw the leader of
the opposition Morgan Tsvangirai being seriously assaulted by state agents
were a cause for concern for the continent.

Opposition
activists have remained under siege over the past three months with the
police arresting and assaulting suspects while in detention. An estimated
700 opposition activists and supporters have either been arrested, tortured,
abducted, or hospitalised since February. Three people have been killed in
the process.

Reports from all provinces show increasing repression
with police on high alert to thwart any demonstration. Last week five legal
practitioners were detained and assaulted when police violently broke up a
protest march by a group of about 50 lawyers.

The lawyers, most
of them in their gowns, were holding a peaceful demonstration outside the
High Court in Harare to protest the arrest of their colleagues, Alex
Muchadehama and Andrew Makoni. The protest was also against defiance of
court orders by the police. Some of the lawyers including Law Society of
Zimbabwe president, Beatrice Mtetwa, and four others, were singled out and
badly beaten.

The Law Society of South Africa called on Zimbabwean
authorities to cease harassment and intimidation of human rights lawyers.
"LSSA expresses its grave concern at the ongoing harassment of human rights
lawyers in Zimbabwe by the Zimbabwean authorities," chief executive officer
Raj Daya said in a statement.

"We urge the Zimbabwean
authorities to safeguard the right of legal practitioners to practise freely
without fear of intimidation, arrest or assault. Lawyers must be able to
attend court and to consult freely with their clients to provide effective
representation and to protect their clients' rights and freedoms. They must
have proper and unfettered access to the courts and to their clients, and
the lawyer-client relationship must be protected."

Daya urged
the Zimbabwean government to respect the rule of law, carry out the orders
of the courts and uphold the independence of the judiciary and of legal
practitioners.

"The LSSA also expresses its support to the Law
Society of Zimbabwe, its President Beatrice Mtetwa, and its members, and for
the work being done by Zimbabwe Lawyers for Human Rights (ZLHR). The LSSA
joins these legal organisations in strongly condemning the recent arrest and
detention of human rights lawyers Alec Muchadehama and Andrew
Makoni.

"Although the two lawyers have been released, we agree with
the ZLHR that the actions of the Zimbabwean authorities cannot be tolerated
or condoned in a democratic society," says Daya.

Observers said
the public assault on the legal fraternity was a slap in the face for Sadc
and Thabo Mbeki's mediation in the political crisis in
Zimbabwe.

Muchadehama and Makoni were arrested last Friday when
they were defending jailed opposition activists accused of petrol bomb
attacks. They were on Monday charged with obstructing justice and freed on
bail after spending the weekend in police cells.

Locally, the
Combined Harare Residents' Association (CHRA) said it was outraged by the
barbaric attack on lawyers by the police.

"CHRA wishes to reiterate
its commitment to justice, advocates for equity before the law and
vehemently denounces its selective application," it said in a
statement.

"The harassment of people who defend us against
organised violence and torture is a serious mockery to the pronouncements
that Harare is a democracy. We urge the international community, especially
the leadership of the African Union and Sadc, to use their influence with
Harare to end targeted harassment and the disregard of the rule of
law."

Zim needs a new script

Zim Independent

By Brian
Chikwava

TO a man who has only a hammer, every problem he
encounters looks like a nail. So said the American psychologist Abraham
Maslow - and, being a writer, I find myself in a similar position. I happen
to have only a pen, and every problem that crosses my path resembles a story
in need of fixing.

Because of this, I have come to think that the
art of story writing has a lot in common with the art of
politics.

A glance at Zimbabwe tells me that this is a bad story.
It needs more than thorough editing; it needs a complete rewrite. Whether
the script can be fixed depends not just on its main protagonist, President
Robert Mugabe, but also on the opposition. Their part is to put new ideas on
the table, to carry the story in another direction.

Mugabe
believes he is living an epic history, something like War and Peace. Except
that his story is packed with more heroic exploits than Tolstoy, and can end
only with the triumph of his will over history. The opposition, and many
others, thinks it should be shelved under "tragedy".

Mugabe has
scripted himself into a role in which there is no room for fresh thinking.
If a mhondoro spirit (the mythic lion spirits that are the custodians of the
people) were to appear before him with an offer to give the president
anything he desired, but on condition that this wish shall be given twice to
every citizen, it would not be out of character now for Mugabe to request
that one of his eyes be gouged out.

This is a failure of the
imagination. But it also reflects a failure of the opposition to articulate
its vision. Nowhere was this better illustrated than the week after Morgan
Tsvangirai's brutal assault at the hands of the police. Tsvangirai's wounds
were paraded on television stations worldwide - the veritable
victim.

I am not suggesting that Tsvangirai should not be in pain,
or indeed that he is not a victim. What I seek to understand is how the
people are supposed to reconcile this sorry spectacle with the inspiration
required of an indomitable and populist leader?

For his part,
Mugabe probably suffers sleepless nights and fierce headaches. But we have
yet to hear about that. In an age in which the art of image-making is
mastered even by teenagers on MySpace, it seems odd that Tsvangirai has not
grasped this.

Or maybe the problem is deeper than that. Tsvangirai
has two audiences, after all. One is outside Zimbabwe, to whom he must look
like a victim. The other is in Zimbabwe, to whom he must at least try to act
the part of irrepressible opposition leader. He is not sure if he's a victim
or a fighter.

There is no language to convey an alternative
political project. With a trade-union background, one would have expected
Tsvangirai's Movement for Democratic Change to speak a language that
inspires the common people. Instead he has flirted with neo-liberal
policies.

The opposition does not know whether they are free
marketeers or a grassroots movement. Lacking the right words to spell this
out clearly, Mugabe has been able to pose as a people's leader, monopolising
the idiom of the left - with all its leftist language.

This may
explain why Tsvangirai, given a chance to script a new plot for Zimbabwe's
future, is still holding his pen in mid-air. A better story lies somewhere
inside his head, but he does not have the language for the task. Staring at
a blank sheet of paper in front of him, Tsvangirai must confront the first
question of characterisation: is his protagonist hero or victim? -
Kubatana.net

* Brian Chikwava is a Zimbabwean writer and winner of
the 2004 Caine Prize for African Writing.

Nigeria's best from a bad job

Zim Independent

By Dele
Olojede

THE new president must first curb the newly ascendant
members of the thieving classes, who must surely have thoughts of dictating
the direction of things.

The paradox of Nigeria's recently
concluded elections is that the country got the right man from the wrong
process. The man who emerged from the shambolic elections as the new
president-elect, Umaru Yar'Adua, is by most accounts a decent man with a
reputation - unusual in a Nigerian politician - for honesty, modesty, and an
almost ascetic lack of self-interest.

Of the three major
candidates - the others were outgoing President Olusegun Obasanjo's
estranged deputy, Atiku Abubakar, who always seemed to carry more than a
whiff of scandal about him, and a mean-spirited former military dictator,
the retired general Muhammadu Buhari - Yar'Adua was widely seen as the best
of the lot, and also the most likely to win.

Which is why, in
presiding over the worst elections ever conducted in Nigeria, one marked by
a combination of rigging and incompetence, Obasanjo has done Yar'Adua no
favours. The new president, scheduled to assume office on May 29, now has a
more difficult challenge. He will first have to persuade the public of his
legitimacy before he can gain enough political authority to embark on the
urgent task of national renewal.

The mild-mannered Yar'Adua takes
over from the mercurial Obasanjo, a retired general and former military
ruler. In this, his second incarnation as an elected leader for the past
eight years, Obasanjo racked up an array of major achievements scarcely
matched by any previous Nigerian leader.

He inherited a country
from which millions of its best and brightest had fled. The economy was
basically dead. Bloodthirsty General Sani Abacha had been simply carting
away dollar bills from the treasury when not casually ordering the
assassination of political opponents, including their wives and
relatives.

Obasanjo, having wasted his first four-year term, set
about reforming the system with a zeal.

He brought together a
group of young and idealistic people in his economic team and they hacked
through the jungle of regulations and bottlenecks to growth.

They pulled the government back from large sections of the economy - in
banking, telecommunications, solid minerals - and helped unleash the great
entrepreneurial drive for which Nigerians are famous.

They got the
country out of a US$35-billion external debt and are leaving foreign
reserves of about $50 billion for the next government.

Nigeria went
from 400 000 telephone lines to around 40 million in six years. The
agriculture sector, which employs more Nigerians, has been growing around
12% a year and the overall economy is expanding at around 7%.

They
instituted financial controls, introduced transparency in procurement and
kept a tight leash on spending.

Above all, Obasanjo helped create
an anti-corruption agency which, for the first time, began to call to
account the most powerful members of Nigeria's rapacious political elite. So
effective was the campaign by the Economic and Financial Crimes Commission,
led by a committed lawyer, Nuhu Ribadu, that a saying soon gained currency
in Nigeria: "The fear of Nuhu is the beginning of wisdom."

Obasanjo's dedicated band of reformers, in which, by the way, women were
well represented, began to clear the path for a new Nigeria to emerge from
the dark ages of congenital misrule. But a funny thing happened on the way
to the promised land.

Around 18 months ago, Obasanjo allowed
himself to be seduced by the number of sycophants who tend to hang around
the powerful. Without ever publicly admitting to harbouring such ambitions,
he allowed his minions to conduct a destructive campaign to secure him a
third term in office, though the constitution allows for only two. Fanning
out across the capital Lagos, with sacks of cash to bribe senators and
members of the House of Representatives, Obasanjo's "amen corner" worked to
change the constitution to favour a 70-year-old man's desire to remain in
power.

To improve his chances of success, Obasanjo, of necessity,
got into bed with many odious characters whom he had previously condemned in
public as the epitome of corruption. As his desire to hang on to power
increased, so did the importance of the worst elements of the political
class.

To the eternal credit of the National Assembly - whose
members previously had given no indication of a capacity for resisting cold
cash - the move to amend the constitution was defeated. To his credit,
though he could have so attempted, Obasanjo refrained from seeking
extra-legal means to perpetuate himself in power.

This was one
of the best illustrations of the mercurial nature of Nigeria's outgoing
president: he was willing to be tempted to hang onto office, but he was, in
the end, unwilling to break the law to do it. Of course, by this time -
April last year - it was too late. The government had largely shifted its
energy from governing to full-time politics.

The corrupt
politicians - mostly governors, and especially governors from the oil-rich
and poverty-stricken Niger Delta - who had been in retreat, roared right
back to the forefront of politics, and Obasanjo could no longer plausibly
separate himself from them.

The president's worst attributes gained
ascendancy. Of the two dogs that we all seem to have in us, Obasanjo by now
was mostly feeding the bad dog.

Desperate to protect himself
after he leaves office, Obasanjo initiated a scramble to manipulate the
elections in favour of his chosen successors. He supported the right man to
succeed him, but was determined to encourage the worst process in aid of
that goal. The end justified the means, and so it was that the embarrassing
elections confirmed outsiders' deepest prejudices about Nigeria, and of
Nigerians' basest expectations of their leaders.

The
deliberately botched elections, which all but the most self-deluding
concluded did not meet the minimal standards of fairness, masked other
aspects of democratic rule taking root in Nigeria.

The legislature,
as we have noted, was willing to stand up at a time of great constitutional
moment, and refused to change the law to favour an individual. Perhaps more
importantly, the judiciary, notorious for years for doing the bidding of the
executive, has begun to assert itself.

For example, Obasanjo did
not trust the voters to reject his deputy, who was seeking the presidency.
Instead he used every means, many skirting the edges of legality, to try to
prevent Abubakar from getting on the ballot at all. But the Supreme Court,
in a unanimous decision barely a week before the election, ruled that the
effort to prevent Abubakar from running was unconstitutional.

And so, in his final days, we see the general in his labyrinth, frantically
busy as if he has another four years in the presidency. He is issuing
instructions and commissioning large projects and generally carrying on like
a man who can see the end of the road but plunges ahead anyway. He knows he
is heading back to his farm under a cloud. It was not the final act he
envisaged, where our hero rides off into a new life as Africa's pre-eminent
statesman and the spokesman for the renaissance.

But after the
bitter disappointment with his conduct in the waning months of his
presidency subsides, it will be possible to judge him fairly - as the man
who revived his country from the dead and set it on a path where his
successor now has a real chance of turning it into Africa's giant.

Nigerians are relieved that they have at least managed to arrange, for the
first time, the transition from one (more or less) elected government to
another. Many are exhausted from eight years of Obasanjo and are glad to be
rid of him. What comes after has every chance of being demonstrably better.
But in Nigeria, only the fool will bet the house. - Sunday
Times.

* Olojede, a winner of the Pulitzer Prize, runs a media and
consulting company and commutes between Johannesburg and
Lagos.

It won't go
away

That was the position adopted by the Anti-Apartheid
movement in the 1970s. It is one that our critics abroad will say needs to
be applied to Zimbabwe today.

Australia's decision to instruct
its cricket players not to proceed with the One-Day series in Harare and the
support given to that stance by England's MCC and New Zealand suggest a
hardening of positions as Zimbabwe sinks into lawlessness. The United States
has issued a new travel advisory warning its citizens that Zimbabwe is not a
safe destination.

There is of course no threat to the safety of
sportsmen and women coming here. But it must be borne in mind that one of
the most vicious attacks on a Zimbabwean citizen took place at Harare
airport in full view of the travelling public. So when Information minister
Sikhanyiso Ndlovu fatuously states that the US travel warning was an
infringement of US citizens' right to visit Zimbabwe, he must explain what
steps the police have taken to bring to justice those responsible for the
assault on Nelson Chamisa.

Is it not the duty of governments to
warn their citizens of possible danger?

And it is not just
prominent politicians who have been attacked. Lawyers demonstrating against
the arrests of colleagues have been picked up and taken to an open space in
Eastlea where they were systematically assaulted by police.

The
president of the Law Society of Zimbabwe was among them.

The Law
Society has been the subject of vitriolic attacks by government spokesmen in
the state media.

Even commuters waiting to catch taxis at Fourth
Street bus terminus have been assaulted for no other reason than the
suspicion that because they were going to Epworth they must be responsible
for political violence!

Can government ministers persist in the
pretence that Zimbabwe is a normal society when lawyers are arrested for
defending their clients, opposition supporters are abducted and tortured by
state agents, and commuters are assaulted on the grounds that they come from
a politically active community?

Where courts have ordered the
release of detainees, the police have not immediately complied.

This is the situation which Ndlovu would have us believe is conducive to the
visits of international sporting teams and tourists. The reality is Zimbabwe
is a society in turmoil. And it is wholly the product of a government so
insecure that it is scared of its own shadow.

None of the charges
of terrorism against MDC supporters have been proved and we can be fairly
certain they will ultimately go the same way as those brought against MDC
officials in Bulawayo, accused in 2001 of the murder of war veteran Cain
Nkala. The judge in that case called police evidence a
fabrication.

President Mugabe and his ministers have invited their
critics to come to Zimbabwe to see for themselves the "real"
situation.

This week there were reports that winter-wheat farmers
in Chinhoyi and Karoi have been ordered to vacate their farms. Their sole
offence was to be white. But it comes just as international agencies report
looming shortages of winter wheat. And Zesa has warned of power cuts so that
power can be diverted from cities to irrigation for wheat
production.

This is the "reality" visitors need to see. This is a
nation that used to feed itself and had an effective electricity supply from
early in the last century until very recently.

Policies that
sabotage agricultural production now run in tandem with violence against the
regime's critics. Those who have a contribution to make in remedying the
on-going political and economic crisis are silenced so those responsible for
the nation's impoverishment can persist in their asset-stripping habits. And
then the government reacts with indignation when foreigners say this is not
a country they can do business with - which includes playing
sport.

President Mugabe, or his representative, may be able to
attend the EU-Africa summit in Lisbon at the end of the year. But the
Portuguese will find their cherished meeting diverted by the Zimbabwe issue.
It won't go away. And so long as people are being beaten, with the blessing
of the head of state, nor should it be allowed to.

Nhema's honour
unenviable

Zim Independent

Candid Comment

By Joram Nyathi

I WISH to
congratulate Environment and Tourism minister Francis Nhema on being voted
to chair the United Nations Commission on Sustainable Development (CSD). I
would like to believe those who voted for Zimbabwe looked beyond the madness
and believe their action will be part of the antidote.

I didn't
have the time to find out how countries are chosen to chair the CSD except
that it has to be on a rotational basis. Once it became Africa's turn, the
lot apparently fell to Zimbabwe. What is not clear is whether those who vote
for the chairman carry out an assessment of the country or was it simply a
solidarity, reflexive reaction? Was Zimbabwe chosen merely to spite Tony
Blair and George Bush or was there an assessment of Zimbabwe's environmental
policies?

If the former is the case then it reduces the UN agency
to a charade. If the latter is the case, then I shudder to imagine what the
environmental situation is like in the rest of the continent! But what we
cannot take away from Nhema personally is that he has been vocal in his
opposition to environmental degradation, uncontrolled veldfires and the
destruction of conservancies in the course of unplanned land
occupations.

Nhema's tenure is unenviable. Media reports say he
will focus on desertification, agriculture, rural development, land and
drought. All these are issues which have been intricately linked to
governance issues in Zimbabwe since government embarked on its land reform
in 2000, a process which has witnessed unprecedented decline in agricultural
production, economic performance and food self-sufficiency. It is a process
which has seen the dislocation of well-integrated industrial sector and its
agricultural base.

Apart from some 350 000 displaced commercial
farm workers, formal unemployment is reportedly close to 80% and inflation
is over 2 200%.

If there had been an environmental assessment team
visiting Zimbabwe, it should not have missed the raw sewage flowing into
Harare's sources of drinking water, the death of fish at Lake Chivero and
the unauthorised cutting of trees along the country's highways to sell as
firewood. The team couldn't have missed the mountains of uncollected garbage
in Harare's residential areas. Add to this the choking plumes of black smoke
as people daily burn the same garbage and you have a clear picture of what a
clean environment we live in. But if in the end all this counted in our
favour for the chair of the CSD, then we don't need worse
enemies.

If once Zimbabwe was a model in food self-sufficiency for
the region to emulate, we have forfeited that to the most unlikely
competitors - Malawi and Zambia - to whom we must now go on bended knee to
beg for maize. They have revolutionised their agricultural production
without pretending to reinvent the wheel. There is nothing wrong with land
redistribution. Unfortunately for political reasons, Zimbabwe's approach was
to destroy everything which looked like the source of power for the white
establishment when that establishment was no longer of any use to Zanu PF.
While the set-up had been tolerated since Independence in 1980 because it
gave the country a semblance of stability, chaos became unavoidable once the
same source of white power became also the base for black political
resistance to economic mismanagement.

Rural development will be
hard for Nhema to prove in the past seven years. What has been most evident
is wanton destruction of the environment, cutting and burning of forests,
siltation of dams and snaring and slaughter of wild animals as rural poverty
has settled in. What has been evident is the gradual severance of familial
links between Zimbabwe's urban poor and their rural relatives as the cost of
transport has soared.

It is easy to blame our food deficit on
drought, but that is nothing new. We have had droughts in the past.
Meteorologists forecast that sub-Sahara will experience more droughts in the
coming years. South Africa is reportedly experiencing its worst recorded
drought this year. So there is nothing uniquely Zimbabwean about droughts.
It's something which can be anticipated and mitigated.

The
excuse about droughts doesn't go beyond its political convenience - like
Western sanctions which are described as a non-event today and then as the
major source of the country's problems tomorrow. Or like praising Africa for
bestowing this honour on Zimbabwe but attacking the Pan African Parliament
as a "noise-making" body for wanting to send a fact-finding mission to
Zimbabwe to probe human rights violations. How vain can we get!

My charitable verdict about Zimbabwe's nomination is that we are seen as the
errant schoolboy who is appointed prefect to rein him in. We have become the
spoiler in the neighbourhood. There is precious little to feel smug about.
It is an honour for which I feel sorry for Nhema because he will need to
demonstrate to the rest of the world that it is deserved - that we can
maintain a clean environment, achieve rural development, and are able to
revive agriculture and put productive land to good use, all of which require
a return to the rule of law.

At the personal level, Nhema's
performance at Zimbabwe Building Society was lacklustre; he has been less
than inspiring as Environment minister; while as a farmer was is described
as a disaster. Together with his country, they are a bad advertisement for
donor funding in his new role at the UN. At the global level, Zimbabwe's
choice feeds the perception, already well-nourished, that in Africa acts of
infamy like torture, violence and beating up of political opponents are
rewarded.

Misplaced
triumph

Zim Independent

Editor's Memo

By Dumisani Muleya

CONFIRMATION last week by
British Prime Minister Tony Blair that he will quit No 10 Downing Street
next month was greeted with misplaced triumph by Zimbabwe's authorities who
are anxious to push the fiction that our current problems stem from a
dispute between London and Harare.

The usually less-than-candid -
and every so often delusional - officials were wheeled out by the state
media to advertise their crass views on our international relations and give
some bit of comic relief to an otherwise gloomy population.

We
were told it was "good riddance" that Blair was going; that "Blair was a
disaster"; "Blair was a failure" and Blair was this and that.

But
look who was talking. There was nothing wrong with government officials
saying what they thought about Blair and giving their own assessment of his
legacy. However, they were the least qualified to judge him on the issue of
leadership and governance.

Starting with the comical part of it, it
was amusing to hear spokespersons for a bankrupt regime which in 2005
mounted a whole general election campaign under the banner "Anti-Blair
Election" celebrating the exit of a man they said was "dead and buried" two
years ago.

It was nearly as funny as President Robert Mugabe
begging to talk to Blair immediately after "defeating" him in
2005.

Why plead for talks with a man whom you have defeated? And
anyway, how do you build bridges with a "gay gangster"?

Harare's case is often weakened by official pretence and flights of fancy.
It would have been better for ministers to make their argument against Blair
and the West in a rational and compelling manner, firstly to win hearts and
minds at home, and then to get a grip on international public
opinion.

The real question here is whether Britain's policy
towards Harare will shift after Blair. Or better still, will the situation
on the ground locally change?

Frankly speaking, nothing will
change. It won't change anything because the problem is not between the two
countries as claimed by government. It's largely a question of leadership
and policy failures in Zimbabwe. The rest are either aggravating factors or
simply red-herrings.

If government wants to prove this, let Mugabe
announce he is going soon and see what happens. Only Mugabe's departure -
not Blair's - will change things in this country.

In terms of
vision, leadership and governance, Mugabe and his cronies are barely
qualified to review Blair's legacy. In the context of the crisis of
leadership and governance in this country, they really have no moral high
ground or legitimate basis beyond their democratic right to hold their own
opinions (something they violently deny their fellow citizens) to judge
Blair. This is not to say Blair was infallible, far from it.

Let's compare Blair's and Mugabe's records. When Blair came to power in May
1997, he had a vision to modernise Britain through the Third Way, a centrist
philosophy of governance that embraces a mix of market and interventionist
policies. It requires the abandonment of hard-and-fast ideological
positions, such as public ownership, which characterised Old
Labour.

Building on Margaret Thatcher's reforms between 1979
and 1990, Blair modernised his country and notched a record by driving one
of the longest stretches of economic growth in modern Britain.

Ironically, he did this at a time when Mugabe was setting his own record in
the opposite direction: presiding over a 10-year economic decline.

Blair rescued a country facing fossilisation of its public instutions,
infrastructure and services and left it enjoying unprecedented prosperity.
Having modernised his sclerotic party he turned Britain into the most
productive economy in Europe. Today thousands are migrating there from
countries such as Poland and even France because of the opportunities it
offers.

He also extended self-government to Scotland and Wales
and oversaw the Northern Ireland peace process.

Mugabe, by way
of contrast, will certainly leave Zimbabwe in ruins. His legacy will be a
polarised and pauperised country.

Blair put Africa on the global
development agenda, but Mugabe has put Africa under the global spotlight for
the wrong reasons.

The catastrophic Iraq war engineered by the US
Neo-Conservatives and domestic issues such as party funding blighted Blair's
last days. Blair at least had the decency to admit some of his
mistakes.

By contrast, Mugabe came to power in 1980 offering a
different package: a one party state, a command economy, and voodoo
socialism as his vision. His first step was fierce political repression to
establish a defacto one party state and intervene in the economy with
disastrous consequences. These sowed the early seeds for the current crisis,
and by 1997 the die was cast.

Although it was good for
government to build schools, clinics and roads (in fact this is one of its
main obligations) in the early 1980s, this does not change the fact that
Mugabe's vision, if he had one, was based on a deeply-flawed philosophy of
entitlement to rule. In the end, by any account, Mugabe's rule has been a
disaster. Not so with Blair. Yes, he will be judged to have misled his
country on the Iraq war but he leaves a country at the top of its league in
terms of economic performance and offering opportunities that others in
Europe envy. Ask Nicolas Sarkozy.

What's Nhema's claim to
fame?

Zim Independent

Muckraker

THE government media has been triumphant over the
appointment of Francis Nhema to head the United Nations Commission on
Sustainable Development. But it has been revealed that his own record of
sustainable development is less than accomplished.

The owners
of the once-productive farm he took over after it was seized by war veterans
in 2002 say much of the land is now more like a desert, according to the
London Telegraph.

"The 800-hectare farm at Nyamanda used to grow 90
hectares of maize and 80 hectares of tobacco, as well as beef cattle, pigs
and sheep," the paper said. "But Chris Shepherd (42) who still holds the
farm's title deeds, said that when he flew low over Nyamanda a few weeks
ago, he was shocked by its decline.

"There were about 50 acres
of appalling maize, which will produce nothing. It hasn't been irrigated and
yet the dam was full," he said. "The place looks dreadful. Two of the
tobacco barns which were burnt down after Nhema moved in have not been
rebuilt. I could hardly believe my eyes when I saw the destruction and lack
of crops. I hadn't seen it since I was forced to leave."

Last
week the Famine Early Warning Systems Network, which monitors food security
in sub-Saharan Africa, issued an alert that Zimbabwe had produced less than
half the maize it needs to feed its population, the Telegraph points out.
Not very sustainable is it?

Incidentally, the Sunday Mail claimed
Nhema was "unanimously elected" while the Zanu PF mouthpiece, The Voice,
published on the same day said countries "voted 26-21" for Zimbabwe to chair
the CSD. What's going on here?

Muckraker was interested to see
a letter to the editor from DJ Chigaru, general manager of the Zimbabwe
International Trade Fair Company. He complained of misrepresentation by our
newspapers regarding the number of foreign countries exhibiting at this
year's fair.

He understandably took exception to the heading:
"Worst trade fair in 48 years".

But Chigaru must understand
that, unlike the state press, our newspapers are not in the business of
pretending all is well when it manifestly isn't. The economy is on the rocks
thanks to Zanu PF and that sad reality was reflected at ZITF. Where there
used to be tractors and combine harvesters on display there are now home
remedies for errant husbands.

On April 29 the Sunday News carried a
feature headed "Cellphone herb a hit at ZITF 2007". This referred to a
traditional medicine, ibaso, used to "deal with wayward husbands", being
sold at the market hall.

Women waiting up for their husbands to
come home now have a remedy. "You place ibaso on top of a mirror and then
burn it," we were told. "You remove all your clothes, including the
undergarments and, with your naked body reflecting in the mirror, you say
all that you can, calling your husband to come home. If he is entertaining
another woman, the feelings just die off and he dashes home."

A
picture accompanying the article shows two ladies selling "African herbs
which help in boosting the immune system".

That is a very dubious
claim and ranks alongside the Gambian president's recent quackery. But what
does the marketing of "Cellphone" tell us about Zimbabwe's industrial
status? Isn't ZITF supposed to be a shop window to advertise a modern
dynamic economy?

What does Chigaru and his team think they are
doing allowing people to make claims for "boosting the immune system"
without a shred of scientific evidence? It sounds as if the ZITF organisers
have been taking umlomo omnandi (sweet mouth) which was also
available.

"Once you chew it people will like and enjoy all the
words that you utter. You will actually leave people well
convinced."

We have just one question about "Cellphone". What
happens when after the performance with the mirror and candle you get
"Sorry, the subscriber you have dialled is busy."?

Bright
Matonga should learn that it is sometimes better to say nothing than to say
the first thing that comes into his head. His "Good riddance" remark on Tony
Blair's departure appeared churlish and immature. So did comments by Didymus
Mutasa.

Do they want to be taken seriously? If so this is not the
way to go about it.

Australia's decision to pull out of the
Zimbabwe cricket tour was a "racist ploy", Matonga declared. And this from a
member of a government that has confiscated thousands of farms from
productive farmers targeted simply because they belonged to a minority
race!

And how about this for a contradiction: "This is also a
racist ploy to kill our local cricket since our cricket team is now
dominated by black players.But still, we will not lose anything because
cricket is not a major sport here."

So what's it to be Bright?
Local cricketers will suffer or "good riddance" because we don't
care?

You can't have it both ways. Sikhanyiso Ndlovu claimed that
the right to play sport was a human right which must be respected under the
UN charter. This will come as news to the UN! And this from a member of a
government that assaults lawyers conducting a peaceful protest against the
arrest of their colleagues.

Let's hope the pictures of Beatrice
Mtetwa's injuries are published far and wide so the world knows what human
rights mean to this regime. And who has been promoting politics in sport on
a sustained basis since 2000? Who has been interfering with team selections?
Who has presided over the collapse of Zimbabwe cricket? Not the
Australians.

It might be worth here quoting John
Howard.

"I have no doubt that if this tour goes ahead it will be an
enormous boost to this grubby dictator."

As for Matonga's
comments on Blair, it cannot have escaped the public's notice that the 10
years of unprecedented growth and prosperity Blair presided over in the UK
coincides exactly with Zimbabwe's economic contraction.

Blair
came to power in 1997 and immediately let it be known that he would pursue
tight fiscal policies which became the basis for 10 years of steady growth.
In the same year President Mugabe authorised the release of millions of
dollars to propitiate restive war veterans. The economy, further battered by
land seizures, has never recovered.

Why does Matonga think people
won't notice the contrast? Millions of Zimbabweans have decided that they
would prefer to live in Britain than Zimbabwe. What does that tell us about
the regime's sterile claims?

Is NSSA acting general manager
Amod Takawira a Zanu PF activist? We ask because he has been releasing
confidential documents to the Herald as ammunition in the state's ongoing
war with the ZCTU.

This concerns the dubious National Health
Insurance Scheme which will be an additional burden on taxpayers. It will
also of course go to the upkeep of another top-heavy parasitic parastatal
that provides sheltered employment to people like Takawira who is now
singing for his supper.

How professional is it to denounce the ZCTU
in the state media? This is yet another scheme that nobody
wants.

Muckraker is busy collecting evidence of official lies
in the state media. We spotted one last week. Most journalists working in
this country and South Africa know that former rebel leader Ian Smith has
been resident in Cape Town for a number of years. This is so he can be near
his daughter.

But reporters and columnists with state newspapers
are obliged to state that he lives on his farm in Shurugwi.

This is used to demonstrate President Mugabe's magnanimity.

Another
claim that is often made is that former UN secretary-general Kofi Annan has
said that sanctions against Zimbabwe were illegal.

He never
actually said that. We know because we checked with his office. It was a
yarn spun by President Mugabe on his return from a brief meeting with Annan
in Banjul.

There are numerous other stories peddled by the official
media - including the funny suggestion that Don McKinnon is
Australian.

There appears to have been some sort of strategy
session after the Sadc summit in Dar-es-Salaam which requires all those in
any way connected to the government to say that all the country's problems
stem from sanctions.

Even Gideon Gono, who has in the past
repeatedly said that most of our problems are of our own making, has now
been pressed into service to provide an opposite point of view.

Writing in Baffour Ankomah's New African magazine, a mouthpiece for
President Mugabe, Gono managed to link every single setback including the
withdrawal of donor agencies to sanctions.

But he should be
careful about who he gets his "facts" from. Zimbabwe's membership of the
Commonwealth was not terminated "in solidarity with the West". Mugabe pulled
out in a fit of pique when a majority of members, including those in the
Caribbean, Oceania, and South-East Asia, voted to maintain Zimbabwe's
suspension because it had not met any of the democratic conditions
set.

And where did Gono get his extraordinary figures for
Zimbabwe's population? At Independence in 1980, he said, "non-indigenous
Zimbabweans totalled 1,6 million.In contrast the indigenous population
totalled around 4,1 million."

Wrong Gideon. The white
population never at any stage exceeded 270 000. That was in 1973. Even
including Indians and Coloureds it wouldn't have been much more than 300
000. And the indigenous population in 1980 was nearly seven million. By then
the white population had sunk to about 150 000.

The figure of
4,1 million for the indigenous population was accurate for 1960, not 1980!
And this is our Reserve Bank governor writing authoritatively on the land
issue in order to provide assistance to a propaganda offensive.

Gono didn't say in his New African piece what the inflation rate was when he
came into office and what it is now.

Muckraker was interested
to read Caesar Zvayi's interview with Tanzanian ambassador Adadi Rajabu. He
spoke of the mythical economic package that Sadc would be offering
Zimbabwe.

"The Sadc executive secretary after visiting and having
extensive consultations with relevant authorities in Zimbabwe will come up
with advice on how Sadc can come in with assistance," Rajabu
said.

There was something he didn't say here. The executive
secretary, Tomaz Salamao, had to be acquainted with the latest report of the
IMF team on Zimbabwe which pointed out what needs to be done before
international donors can resume assistance.

He didn't appear to
know anything about this.

Rajabu had some advice for us. "All
opposition parties and Zimbabweans in general should follow the laws and
regulations of the country, failure to that, the law will take its
course."

He didn't suggest the Zimbabwean authorities should be
party to their own laws and regulations and international covenants they
have signed. Why wasn't he asked about beatings in police cells and
detention of lawyers; was that okay with him and Sadc?

We
thought the decision by the Harare council to ban the use of hosepipes was
rather pointless. All around the city water flows across roads from burst
pipes with no sign that the problem is being attended to. Prince Edward St
opposite Alexandra Sports Club provides a good example.

Then
there's the small matter of the sprinkler going full time at the entrance to
Heroes Acre!

Sanctions: lies and
deception

Zim Independent

by Eric Bloch

THIS column has
previously addressed government's continuous efforts to delude the
Zimbabwean population, and others, that government is in no manner
whatsoever responsible for the cataclysmic, continuing decline of the
economy. government's deep-seated conviction of its absolute omnipotence is
so great that it cannot conceive of it in anyway being responsible for the
economic Armageddon that is fast approaching. And government's megalomania
is so intense that it is inevitably accompanied by equally intense
paranoia.

Believing that there is no foundation to any contention
of governmental culpability for the near-total destruction of what could be
southern Africa's second-most virile and vibrant economy, and being
paranoiac, government is wholly convinced that that destruction has
primarily been caused by others, being of evil-intent, albeit aided and
abetted by allegedly adverse climatic conditions.

With
inflation having soared to over 2 200% (based upon the Consumer Price Index)
per annum, and in practice exceeding 8 000%, according to independent
studies, Zimbabwe is sustaining the highest inflation in the world. The
hyperinflation is so pronounced that an estimated 85%, or more, of the
population is striving to survive with insignificant incomes, far below the
Poverty Datum Line (PDL), and more than half of Zimbabwe's people are
suffering at levels below the Food Datum Line (FDL), being the minimum
resources needed to avoid malnutrition.

The magnitude of the
poverty is so great that, according to UNDP, UNAids, WHO and other sources,
average life expectancy, at birth, has fallen from 60 years in 1990 to 37
years in 2004, and some project that by 2007 has fallen further, to about 34
years. The TB prevalence rate, per 100 000 people has risen from 248 in
1990, to 674 in 2004, whilst maternal mortality virtually doubled in 10
years, from 570 per 100 000 in 1990, to 110 000 in 2000.

Formal
sector employment now represents less than 15% of the population, and more
than 20% of the Zimbabwean people (mainly being the skilled and
semi-skilled) have fled the country to seek income in positive
economies.

Recognising that it could not attribute the
encroaching economic demise, accompanied by intensifying poverty and misery,
for all but a few (mainly being the politically well-connected), entirely
upon climatic conditions, government has endlessly sought others to be the
victims of its false allegations of triggering economic devastation, thereby
diverting attention from its own heinous blameworthiness. At different times
it has blamed the minority white population in general, bankers, traders,
and numerous others. But, over the last few years, its principal target for
its deflection of blame has been the international community. It has
especially focused upon the US, the European Union (EU), some Commonwealth
countries, such as Australia, Canada and New Zealand, but most of all upon
Britain and its Prime Minister, Tony Blair.

Continuously,
government spew-ed forth its vitriol against all these perceived enemies of
Zimbabwe, contending endlessly that they were trying to re-colonise Zimbabwe
(which is the last thing any of them would wish for), were determined to
cower Zimbabwe into unmitigated subjugation, overthrow its government, and
loot Zimbabwe's wealth. Presumably government espouses the same beliefs that
Adolf Hitler's chief propagandist had, that constant repetition will create
ultimate belief of anything, even that which is devoid of any truth
whatsoever. But Zimbabweans, and the world at large, are not that gullible.
No matter how recurrently government has striven to convince the
Zimbabweans, and the world at large, that that is so, most have not been
duped.

Despite its spin doctors, its newspapers who resolutely
ignore fact in order to spread deception, and its audio and visual media,
which predominantly do likewise, few have been effectively deceived into
believing that all would be well, were it not for the illusory mythical
machinations of those that government constantly contends are Zimbabwe's
enemies.

Therefore government ultimately concluded that it would
have to find something, or someone, new to blame, but not as would discredit
its prior contentions. Such discreditation would demonstrate government's
pronounced prevarications. So, progressively since 2005, it has recurrently,
and with increasing intensity (commensurate with the accelerating economic
collapse), accused its self-declared enemies of diabolically bringing
Zimbabwe's economy to its knees. The manner of their supposedly achieving
this is claimed to be the application of evilly-conceived economic
sanctions.

The fact is that the only economic sanction imposed by
any is that, in terms of US's Zimbabwe Democracy Act, that country cannot
support any International Monetary Fund (IMF) assistance to Zimbabwe. But no
other economic sanctions exist, despite the Zimbabwe government's contrary,
repeated contentions. None of the countries that have supposedly imposed
economic sanctions have barred trade with, travel to, or investment in,
Zimbabwe. Zimbabwe exports very extensively to the US and the EU, and buys
essential and other goods from them. Most of the investment in the mining
sector in the last few years, although not all, has come from the US,
Canada, Australia and the EU, as has other investment. Surely that is not
evidence of economic sanctions!

Admittedly, none of those
countries are disposed to provide Zimbabwe with loan funding and lines of
credit, but none have barred doing so. The absence of such facilities, from
those countries' public and private sectors, is not due to sanctions, but
because few are determined to risk funding those who are undoubtedly poor
credit risks. Zimbabwe is irrefutably a poor credit risk, with its
continuous adverse balance of payments, its considerable debt arrears, and
its inability even to pay its gold miners for their gold. But the Zimbabwe
government contends the withholding of funding to be "illegal economic
sanctions". Even if such sanctions had been imposed, which they have not,
they would in no manner be illegal, for any country has the sovereign right
to determine with whom to deal, and with whom not to deal.

However, Zimbabwe persists with its unfounded attacks on others, and with
repudiation of all opportunities of Zimbabwean economic transformation, and
of opportunities of international reconciliation. As recently as last week,
when Europe Day was commemorated, the head of the European Commission in
Zimbabwe, Xavier Marchal, demonstrated yet again the EU's conciliatory
stance, saying that it is very willing to carry out dialogue with Zimbabwe
aimed at achieving prospects of "resumption of full co-operation".
Responding thereto, Zimbabwe's Secretary for Foreign Affairs, Ambassador
Joey Bimha resorted, yet again, to the Zimbabwean government falsehood of
the contention that Zimbabwe is the unjust victim of (non-existent)
sanctions.

In contradistinction to his contentions, the EU
states categorically that: "There are no economic sanctions against
Zimbabwe. Trade relations have not been the subject of restrictions from the
EU. The EU as a block continues to be a major trading partner of Zimbabwe
with several EU member states as Zimbabwe's most important markets..Zimbabwe
has benefited from preferences under the ACP-EU Partnership Agreement.
Zimbabwe is a Sugar Protocol Country within the Cotonou Framework". In 2006
the EU was Zimbabwe's largest donor, with total EU support of 193,3 million
euros. (Developmental support from the EU since Zimbabwe's Independence has
amounted to over 1, 2 billion euros). But Zimbabwe continues to allege an
imposition of economic sanctions! It's just not true - the only sanctions
are targeted ones against Zanu PF hierarchy and its pronounced
supporters.

Ambassador Bimha urged for conciliation - directed
dialogue, without the parties setting any "benchmarks" as pre-conditions for
such dialogue, but then called for the EU first to remove its sanctions
against Zimbabwe. Who is setting pre-condition benchmarks, and they being
impossible of fulfillment, for one cannot remove that which does not exist?
At the same time, reacting to the urging by Xavier Marchal for the
establishment of a violence-free environment in Zimbabwe, in which everybody
is treated humanely, and "which clearly does not exist today", Ambassador
Bimha said that his government abhors violence and believes that in a
democratic society people should pursue their political objectives by
non-violent means. He continued that, "Violence should therefore be
condemned by all whenever it rears its ugly head, irrespective of who
perpetrates it", but implied unreservedly that such violence does not
prevail in Zimbabwe or, if so, not at the instance of
government.

What has he been smoking? How does he reconcile such
statements with the unjustified, inhumane, cruel beatings of lawyers only
last week, with the torture in prison cells of MDC arrestees, with the
beatings of numerous Woza women engaged in peaceful protests, and much
more.

Zim Independent Letters

Hard choices aheadBy Eddie Cross

ZIMBABWE is back at
another crucial junction in its short history. At home the economic and
political crisis intensifies by the day. Inflation in April was probably
over 8 000% year-on-year, the currency has slipped to new lows and is
trading at over US$1:$30 000.

Internationally there is a new global
consensus on the Zimbabwe issue. The global community is more united on the
way forward than it has ever been. Regionally there is a shift taking place
as leaders review their stance on Zimbabwe in the light of new evidence that
the continuing crisis here is impacting on their own countries.

For South Africa, time is an important element as their own internal
leadership struggles intensify and the flood of economic and political
refugees from Zimbabwe intensifies social pressures. The time bomb of a
possible review of the decision to stage the World Cup in 2010 in South
Africa remains a potential threat.

Internally Zanu PF is
imploding and various factions are engaged in a struggle for ascendancy that
could lead to real violence and even open conflict. Mugabe remains an
impediment to progress and a spoiler.

The MDC, still to recover
from the damaging split in its ranks in 2005, remains divided on its own
future and strategies for change. It remains the only significant opposition
in the political arena but needs to clear upthe confusion about
its identity and intentions.

For all these players there are hard
choices ahead. The hardest choices lie with the domestic players: for a
civil society that has struggled perhaps as hard as any other player to
secure a decent social and political environment under a sound
constitutional dispensation that protects human and economic rights and will
provide a foundation for future development and progress.

As
for the MDC, it has to decide what it wants to do and it must do so under
considerable pressure from all sides. The MDC must also decide if it is
prepared to walk onto this particular playing field for a contest that looks
like a rerun of David and Goliath. A political contest in which Goliath
chooses both the weapons of combat and the playing field itself.

For Zanu PF the stakes could not be higher. They know that victory will not
be certain as it was in 2002 and 2005, they know that defeat in this
particular game will mean utter defeat, obscurity and uncertainty as to
their own future. They despise their opponents but know they cannot avoid a
showdown and that this time the whole world will be watching in the
stands.

Hard choices are only made under pressure. Today we all
being faced with choices we cannot avoid any longer.

* Cross
writes from Bulawayo.

---------------------

Change World Cup venue

WORLD football controlling body
Fifa should shift the 2010 World Cp tournament from South Africa to any
other country which is not near us in solidarity with millions of tortured
and bruised Zimbabweans.

The staging of the 2010 World Cup
tournament in South Africa will pose a great threat to all those teams
willing to visit or camp in Zimbabwe.

Truth is, Zimbabwe
is not a safe tourist destination as the Zanu PF government would want the
world to believe. Any visit by tourists to Zimbabwe will continue to be
viewed as embracing Mugabe's life threatening rule.

Home
Affairs minister, Kembo Mohadi, recently issued a ministerial statement to
stop a Harare magistrate from giving opposition activists bail. Is this
democracy?

Lawyers including the president of the Law Society
of Zimbabwe, Beatrice Mtetwa, were recently beaten severely by the
police.

Hundreds are being abducted on a daily basis by
state security agents.

It is now up to Thabo Mbeki to see
that Mugabe goes before 2008 and a new constitution is in place before the
2008 elections. Human rights abuses by the Mugabe government have reached
alarming levels that do not need any sympathy from the international
community.

We shall disrupt the 2010 World Cup if Mugabe
continues with rights abuses.

Kurauone
Chihwayi,

Harare.

-------------------------

Torture cannot be justified under
any circumstances

THE Zimbabwe Association of Doctors for
Human Rights (ZADHR) is concerned about the escalating use, by security
forces, of torture, cruel, inhuman or degrading treatment against Zimbabwean
citizens, including members of civil society, the opposition and
professional associations.

It is also of great concern to us
that the condition of those affected has become difficult to monitor because
of the practice of beating people and then holding them in detention without
access to independent medical attention. Over the last few months medical
treatment has increasingly been wilfully delayed or denied by the security
forces resulting in the further deterioration of the condition of injured
persons.

Delaying treatment for blunt trauma and fractures,
particularly of the head, abdomen and chest can cause significant morbidity
and mortality.

Noting the continued use of excessive
force by the Zimbabwe Republic Police, ZADHR condemns the assault on four
senior lawyers by the police on May 8 following an attempt to present a
petition to the Attorney General and the Minister of
Justice.

The lawyers concerned sustained severe bruising
confirmed by medical examination as consistent with beatings by baton
sticks. The police have brought no charges and have given no report of any
provocation. ZADHR urges security forces in Zimbabwe to refrain
from the use of torture and for the government to take any measures
necessary to prevent further acts of torture taking place and to take
appropriate action against the perpetrators.

The
prohibition against torture is absolute and cannot be justified under any
circumstances. As stated in Article 2 of the Convention Against Torture: "No
exceptional circumstances whatsoever, whether a state of war or a threat of
war, internal political instability or any other public emergency, may be
invoked as justification of torture. An order from a superior officer or a
public authority may not be invoked as a justification for
torture."

Zimbabwe Association of

Doctors for Human Rights.

------------------

No show at all

The
letter by ZITF general manager DJ Chigaru (Zimbabwe Independent, May 11)
refers. Apparently after all these years at the helm of the Independent you
still don't understand that (and I quote from Chigaru's letter) "publishing
deliberate misre-presentation and sensationalisation of facts about ZITF
2007" is the sole prerogative of the state media!

Muckraker
mentions that according to the Sunday News "tens of thousands of people
visited the Trade Fair" on its final day. The figures were a deliberate
misrepresentation and sensationalisation of facts! And the true story about
the number of foreign exhibitors we will probably never
know.

I for one hardly saw any at all. The International
Hall was occupied by all sorts of local ministerial departments that had
very little to do with trade, let alone with international
trade.

What a waste of time ZITF was - again! Chigaru
mentions in his final paragraph that "The company does not take kindly to
deliberate distortions". Well, neither do I, Chigaru! And you apparently do
"look forward to more professionalism from journalists": well surprise,
surprise: so do I!

unFair
coverage,

Bulawayo.

-----------------

Daylight robbery

WE
must all protest at the series of thefts now initiated and enabled by the
Harare City Council.

Firstly, the theft of our hard-earned
money when it compels us to buy its bins at suspiciously high prices and,
secondly, of the bins themselves by dishonest passers-by in the streets. Who
will replace the stolen bins? Who will pay for the replacement bins?
Council? Don't hold your breath.

M
Wills,

Harare.

---------------

In solidarity with students
THE World Student Christian Federation (WSCF) has received news from
Zimbabwe that university students were arrested and assaulted in
Harare.

WSCF is deeply concerned about the welfare of
Student Christian Movement of Zimbabwe leaders Prosper Munatsi and
Munyaradzi Chikorohondo (subsequently released.) We note with alarm the
unlawful arrest and brutal treatment of these students.

We urge the Zimbabwean authorities to allow arrested students access to
lawyers, their family members and food and to treat them with dignity and
respect.

We strongly denounce the repression of Zimbabwean
students and condemn the brutality of the police and the security forces and
urge the authorities to guarantee students and all Zimbabweans the right to
meet freely and to protest without fear of harassment and
violence.

The students were arrested by security guards on
May 10 at the University of Zimbabwe, where they had taken part in
organising a peaceful meeting to address student concerns on deteriorating
facilities and academic courses. WSCF notes with concern that students
across Zimbabwe are suffering from conditions which are set to seriously
impede their studies.

Reports from Zimbabwean SCM and other
NGOs show that thousands of students have lost significant portions of their
course hours due to the continuing impasse between striking lecturers and
government. At the same time, students resident on campuses are faced with a
looming health disaster because of the deteriorating sanitary
facilities.

WSCF hence calls on the Zimbabwean government to
urgently address the crisis threatening the country's universities. We ask
that the government in Zimbabwe take action on the national crisis in higher
education. We call on the government to address comprehensively and in good
faith the administration problems at the University of Zimbabwe and the
collapse of living standards of students throughout the
country.

We advocate for active participation of young
Christians in issues affecting their daily lives, particularly contributing
in resolving the current crisis bedeviling their country.

Proverbs 29 verse 2 reads: "When the righteous are in authority, the people
rejoice, but when the wicked rule the people groan."